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TELKOM SA SOC LIMITED - Group Provisional Annual Results for the year ended 31 March 2019

Release Date: 27/05/2019 07:05
Code(s): TL20 TL24 TL25 TL26 TL22 TL23 TLC07 TLC08 TL27 TL29 TL28 TL30 TL31 TKG     PDF:  
Wrap Text
Group Provisional Annual Results for the year ended 31 March 2019

Telkom SA SOC Ltd
(Incorporated in the Republic of South Africa)
Registration number 1991/005476/30
JSE share code: TKG
ISIN: ZAE000044897
JSE bond code: BITEL
("Telkom" or "the company")

Group Provisional Annual Results for the year ended 31 March 2019

Telkom SA SOC Ltd is listed on the JSE Ltd. Information may be accessed on Reuters under the symbol TKGJ.J and on
Bloomberg under the symbol TKG.SJ. Information contained on Reuters and Bloomberg is provided by a third-party 
and is not incorporated by reference herein. Telkom has not approved or verified such information and does not 
accept any liability for the accuracy of such information.

Special note regarding forward-looking statements
Many of the statements in this document, and verbal statements that may be made by Telkom or by officers, directors or
employees acting on Telkom's behalf, constitute or are based on forward-looking statements.

All statements, other than statements of historical facts, including, among others, statements regarding our strategy,
future financial position and plans, objectives, capital expenditures, projected costs and anticipated cost savings and
financing plans, as well as projected levels of growth in the communications market, are forward-looking statements.
Forward-looking statements can generally be identified by the use of terminology such as "may", "will", "should", "expect",
"envisage", "intend", "plan", "project", "estimate", "anticipate", "believe", "hope", "can", "is designed to" or
similar phrases. However, the absence of such words does not necessarily mean that a statement is not forward looking.
Forward-looking statements involve several and unknown risks, uncertainties and other factors that could cause our actual
results and outcomes to be materially different from historical results or from any future results expressed or implied by
such forward-looking statements. Factors that could cause our actual results or outcomes to differ materially from our
expectations, include but are not limited to those risks identified in Telkom's most recent integrated report, which is
available at www.telkom.co.za/ir. 

Telkom cautions readers not to place undue reliance on these forward-looking statements. All written and verbal
forward-looking statements attributable to Telkom, or persons acting on our behalf, are qualified in their entirety by 
these cautionary statements. Moreover, unless we are required by law to update these statements, we will not necessarily 
update any of these statements after the date of this document, so that they conform either to the actual results or to
changes in our expectations.

Any forward looking financial information disclosed in this group provisional annual results for the year ended 
31 March 2019 (the "results announcement") has not been reviewed or audited or otherwise reported on by our 
external joint auditors.  

The FY2018 comparatives of the results announcement are restated for the adoption of IFRS 15 and change in the
presentation of cash flows.

Pro forma information
Certain financial information presented in the results announcement constitute pro forma financial information. This is 
presented for illustrative purposes only. Because of its nature, the pro forma financial information may not fairly 
present Telkom's financial position, changes in equity, and results of operations or cash flows. The pro forma 
financial information is the responsibility of the board of directors of Telkom. The pro forma financial information 
contained in this results announcement has been reviewed by the group's joint independent external auditors and their 
unmodified limited assurance report prepared in terms of ISAE 3420 is available for inspection at the company's 
registered office during office working hours.

The financial information presented in the results announcement has been prepared excluding the impact of the 
voluntary severance packages (VSP), voluntary early retirement packages (VERP) and the section 189 costs 
('the pro forma adjustments') and constitute pro forma financial information to the extent that it is not extracted 
from the segment disclosure included in the summary audited consolidated provisional financial statements for the 
year ended 31 March 2019. This pro forma financial information has been presented to eliminate the impact of the 
pro forma adjustments from the consolidated financial results for the year ended 31 March 2019 to achieve a comparable 
year on year analysis and show the underlying performance of the business. The pro forma adjustments have been 
determined in terms of the group accounting policies disclosed in the consolidated financial statements for the 
year ended 31 March 2019, except for the changes in accounting policies as a result of the adoption of the 
accounting pronouncements effective 1 January 2018 and the JSE Listing Requirements.

Reported March 2019 refers to the March 2019 financial information as included in the summary audited consolidated
provisional financial statements.

The joint independent auditors' audit report by PricewaterhouseCoopers Inc. and SizweNtsalubaGobodo Grant Thornton
Inc. does not report on all of the information contained in this announcement/financial results. Shareholders are 
therefore advised that in order to obtain a full understanding of the nature of the joint independent auditors' 
engagement they should obtain a copy of the joint independent auditors' audit report together with the accompanying 
financial information from Telkom's registered office. 

The directors of Telkom take full responsibility for the preparation of this results announcement including the pro forma
financial information that has been correctly extracted from the underlying audited financial statements.

The information contained in this document is also available on Telkom's investor relations website
www.telkom.co.za/ir. 

Key indicators
All commentary, messaging and indicators in this report for the current year exclude VSP, VERP and section 189
costs of R728 million and the related tax impact of R215 million (the pro forma adjustments).

- Operating revenue1 up 5.3%                  - Mobile service revenue up 58.3%
  FY2019: 41 774                                FY2019: 8 155                             
  FY2018: 39 661                                FY2018: 5 151                            
  R'million                                     R'million                               
                                             
- Fixed service revenue down 8.8%             - Information technology up 6.2%      
  FY2019: 21 167                                FY2019: 6 764                          
  FY2018: 23 216                                FY2018: 6 370                          
  R'million                                     R'million                            
                                                          
- EBITDA2 up 8.5%                             - Capital expenditure down 3.0%        
  FY2019: 11 309                                FY2019: 7 674                          
  FY2018: 10 422                                FY2018: 7 909                          
  R'million                                     R'million                              
                                                       
- BEPS3 up 15.5%                              - HEPS3 up 22.6%
  FY2019: 665.1                                 FY2019: 722.4              
  FY2018: 575.7                                 FY2018: 589.3
  Cents per share                               Cents per share            
                                                                         
- Cash at the end of the year down 43.5%      - Adjusted free cash flow3 up 12.9%  
  FY2019: 1 428                                 FY2019: 534                        
  FY2018: 2 527                                 FY2018: 473                        
  R'million                                     R'million                                       
                                                
1 During the year we restated the prior year revenue by R1 357 million. Of this amount, R656 million related to 
  Smart Office Connexion (SOX). The implementation of IFRS 15 also highlighted a prior year error of 
  R641 million relating to the recognition of Mobile CPE revenue to dealer stores and R60 million related 
  to the adoption of IFRS 15. These revenue adjustments led to a restatement of the prior year number from
  R41 018 to R39 661 million.
2 EBITDA as defined in the IFRS 8 segment note in the consolidated financial information and includes the
  pro forma adjustments. Refer below for the reconciliation of the reported figures to the adjusted figures.
3 Based on pro forma financial information. Refer below for the reconciliation for the reported figures to 
  the adjusted figures.

Telkom structure
Telkom SA SOC Ltd represents Telkom group ("Telkom" or "the group"), which comprises Telkom company and its 
subsidiaries. The Telkom company's subsidiaries are BCX, Gyro and Yellow Pages (known as Trudon). Its 
divisions are Openserve and Telkom Consumer.

In the context of our operating model, business units comprise our divisions and subsidiaries. The "Other" 
segment includes Yellow Pages, VS Gaming and Corporate Centre. 

Openserve is South Africa's leading wholesale infrastructure connectivity provider with the largest open access
network across South Africa. 

Telkom Consumer is South Africa's largest fixed-broadband provider, internet service provider and, together 
with its mobile network, a converged communications provider.

BCX is a leading technology company that provides ICT solutions and an integrated portfolio of technology 
solutions across South Africa.

Gyro is a turn-key solutions provider responsible for managing the mast and tower portfolio, property development 
and property management services on behalf of the group.

Yellow Pages is a local advertising and marketing company that provides services and digital solutions to local
businesses. Yellow Pages' business units operate in South Africa and Namibia.

Adjustments and restatements 

Revenue restatements 
The 31 March 2018 comparative financial information was restated due to a prior year adjustment relating to the
adoption of IFRS 15 (Revenue from contracts with customers). The adoption of the standard had no material impact 
on earnings before interest, taxation, depreciation and amortisation (EBITDA), profit before tax, cashflows, or 
basic earnings per share (BEPS) and headline earnings per share (HEPS). 

As part of the IFRS 15 implementation process, the group reassessed the revenue recognition principles of IAS 18 
and the judgement applied to mobile customer premises equipment (CPE) sales. This resulted in a restatement of 
revenue and cost of handsets. There was no impact on the EBITDA, profit before tax, cashflows or BEPS and HEPS.

During the year we identified that due to protective rights historically granted to the minority shareholder, in
respect of SOX, which is a 51 percent previously consolidated entity, BCX concluded that it did not have control of 
the entity as defined by IFRS 10 (Consolidated financial statements). There was no material impact from the accounting 
standard on the EBITDA, profit before tax, cashflows or BEPS and HEPS. 

Both matters (IAS 18 and IFRS 10) were assessed as material prior year errors and were corrected by restating the
comparative figures as required by IAS 8 (Accounting policies, changes in accounting estimates and errors). 
         
                                                    Previously
                                                      Reported                           Restated
                                                         March                         March 2018      
                                                          2018      Restatements           
                                                            Rm                Rm               Rm    
Revenue                                                 41 018            (1 357)          39 661    
IFRS 15                                                                      (60)                    
IAS 18                                                                      (641)                    
IFRS 10                                                                     (656)                    
EBITDA                                                  10 544              (122)          10 422    
IFRS 15                                                                      (29)                    
IFRS 10                                                                      (93)                    
Profit after tax                                         3 158              (160)           2 998    
IFRS 15                                                                      (29)                    
IFRS 10                                                                     (131)                    
BEPS (cents)                                             602.3             (26.6)           575.7    
IFRS 15                                                                     (5.7)                    
IFRS 10                                                                    (20.9)                    
Free cash flow                                             501               (28)             473    
IFRS 10                                                                      (28)                    

IFRS 9 
IFRS 9 (Financial instruments) was adopted without restating comparative financial information. In accordance with 
the transitional provisions of the standard, the adjustment arising from the implementation of the expected credit 
loss model is not reflected in the restated statement of financial position as at 1 April 2017 and 31 March 2018, 
but is recognised as an adjustment to the retained earnings opening balance as at 1 April 2018. 

Pro forma financial information
Certain financial information presented in this results announcement constitutes pro forma financial information in
terms of the JSE Listings Requirements. The pro forma financial information is presented to assist a user to analyse 
the underlying performance of the business. The pro forma adjustments include the impact of the VSP, VERP and 
section 189 costs of R728 million and the related tax impact of R215 million. The pro forma consolidated income 
statement and pro forma consolidated cash flow statement and all related KPIs and messages in this booklet are 
based on this adjusted 31 March 2019 base. The applicable criteria on which this pro forma financial information is 
reported and prepared, is set out below.

                                                      Reported                           Adjusted1     
                                                         March         Pro forma            March    
                                                          2019        adjustment             2019    
                                                            Rm                Rm               Rm    
Operating expenses                                      22 310              (728)          21 582    
Employee expenses                                       10 777              (728)          10 049    
EBITDA                                                  10 581               728           11 309    
Operating profit                                         4 767               728            5 495    
Taxation                                                 1 176               215            1 391    
Profit for the period                                    2 831               513            3 344    
BEPS (cents)                                             561.9                              665.1    
HEPS (cents)                                             619.2                              722.4    
1 Excluding the impact of VSP, VERP and section 189 of R728 million and the related tax impact 
  of R215 million. 

Results from operations

The group profit after tax increased by 11.5 percent to R3 344 million (FY2018: R2 998 million). This is mainly
attributable to the 8.5 percent increase in EBITDA2 to R11 309 million, offset by a 25.0 percent increase in the 
taxation expense and a 4.1 percent increase in depreciation, amortisation, impairments and write-offs, resulting 
in a 22.6 percent increase in adjusted HEPS.
2 EBITDA as defined in the IFRS 8 segment note in the consolidated financial information and includes the
  pro forma adjustments.

OVERVIEW OF OUR BUSINESS
Telkom announced its group results for the year ended 31 March 2019 on 27 May 2019 in Centurion, South Africa. 
Telkom delivered a solid performance with group operating revenue increasing by 5.3 percent, driven by the stellar
performance of our mobile business. Mobile service revenue increased by 58.3 percent, underpinned by our broadband-led
proposition. BCX recorded growth in information technology (IT) revenue from external enterprise customers despite the 
weak economic environment and Gyro performed very well. The change in technology continues to put our fixed business under
pressure with fixed voice revenue negatively impacting the overall performance of BCX and Openserve. Overall, I am pleased
that the growth in the new revenue streams drives overall growth for the group attesting to the success of our
investment strategy. 

Message from group chief executive officer: 
Sipho Maseko
The significant growth in mobile service revenue was supported by an 85.9 percent growth in active subscribers to 
9.7 million, as our affordable broadband-led proposition continues to resonate with customers. Despite adding 
4.5 million subscribers in the year, our blended average revenue per user (ARPU) was stable at R100. Pre-paid 
subscribers more than doubled compared to the prior year, increasing by 109.3 percent to 7.8 million 
(FY2018: 3.7 million). Our pre-paid proposition continues to attract good quality subscribers demonstrated 
by a significant increase in pre-paid ARPU of 19.8 percent to R71. Post-paid subscribers increased by 
26.8 percent, with net additions of approximately 396 000 to reach 1.9 million, with an ARPU of R186. 

Our strategy to separate our property and mast and tower portfolio to increase management focus and unlock value 
for the group is bearing fruit. Gyro's external revenue grew by 24.2 percent and the mast and tower tenants grew 
by 10.5 percent compared to FY2018.

BCX's IT revenue from external customers grew 6.2 percent. This was achieved despite the weak economic environment 
where South Africa experienced a technical recession in the first half of the year, and consumers were under 
pressure from increases in tax and fuel and a weaker currency. This is an encouraging result given that BCX 
touches all sectors of the economy. I am particularly pleased that BCX has now stabilised as an organisation, 
mainly attributable to a new leadership team, a change in the operating model and an enhanced strategy focusing 
on customer retention.  

Notwithstanding the group's solid performance, evolving technology is a key challenge. This is evident by a decline 
of 7.9 percent in the fixed business revenue across the group, as customers migrate to new technologies. Fixed voice 
and interconnection revenue declined by 14.3 percent, which negatively impacted the overall performance of Openserve 
and BCX. Despite this impact, overall revenue decline was contained at 3.3 percent for Openserve and 3.4 percent 
for BCX.  

The declining traditional revenue has an EBITDA dilution impact and requires sustainable cost management initiatives
to preserve margins. We implemented several cost optimisation initiatives which led to underlying group EBITDA increasing
by 8.5 percent ahead of revenue growth of 5.3 percent. The EBITDA margin expanded by 0.8 percentage points to 27.1 percent. 
We remain focused on operational efficiencies to preserve margins while our revenues evolve, and we manage the 
impact of inflation on our expenses. 

Our capital investment of R7.7 billion continues to underpin our growth, with a capital expenditure (capex) to revenue
ratio of 18.4 percent. Our ongoing investment enabled Telkom to grow new revenue in evolving technology, offsetting the
traditional revenue shrinkage. Over the past six years, the contribution of our new revenue streams has grown significantly,
the mobile revenue contribution increased from 3.2 percent to 25.7 percent, and IT revenue grew from 0.9 percent to 
16.2 percent. We continue to invest in the fibre ecosystem which sustains our fixed data revenue. We are prudent in our
homes passed by fibre strategy and focus on homes connected. We increased the home connectivity rate to 38.4 percent
(FY2018: 30.7 percent). We remain a market leader in fibre to the business and backhaul, with the majority of our sites 
connected with fibre. We continue to modernise our network through the packet optical transport network (POTN), which 
will future-proof the core network and enable data growth across access aggregation and core networks. This is the 
foundation for software-defined networks and network functional virtualisation capability.

Sipho Maseko
Group chief executive officer

Overview of our business
FINANCIAL CAPITAL

Key salient features 
- Group operating revenue1 up 5.3 percent to R41.8 billion
- EBITDA2 up 8.5 percent to R11.3 billion
- EBITDA margin of 27.1 percent
- Capex of R7.7 billion with capex to revenue ratio of 18.4 percent
- HEPS3 up 22.6 percent to 722.4 cents
- Final ordinary dividend of 249 cents taking the annual dividend to 362 cents, an increase of 
  2.0 percent year on year 

Financial information summary
                                                             Adjusted       Restated                  
                                                                March          March                  
                                                                 2019           2018      Variance    
                                                                   Rm             Rm             %    
Gross operating revenue1                                       41 774         39 661           5.3    
EBITDA2                                                        11 309         10 422           8.5    
Capital expenditure                                             7 674          7 909          (3.0)    
Free cash flow3                                                   534            473          12.9    
Net debt                                                        8 813          6 870         (28.3)   
Headline earnings per share (cents)3                            722.4          589.3          22.6    
EBITDA margin (%)2                                               27.1           26.3       
Effective tax rate (%)                                           29.4           27.6                  
Capex to revenue (%)                                             18.4           19.9                  
Net debt to EBITDA (times)                                        0.8            0.7                  
Return on invested capital (%)                                   11.3           10.2                  
1 During the year we restated the prior year revenue by R1 357 million. Of this amount, R656 million related  
  to Smart Office Connexion (SOX). The implementation of IFRS 15 also highlighted a prior year error of 
  R641 million relating to the recognition of mobile CPE revenue to dealer stores and R60 million related to 
  the adoption of IFRS 15. These revenue adjustments led to a restatement of the prior year number from 
  R41 018 to R39 661 million.
2 EBITDA as defined in the IFRS 8 segment note in the consolidated financial information and includes the
  pro forma adjustments. Refer below for the reconciliation of the reported figures to the adjusted figures.
3 Based on pro forma financial information. Refer below for the reconciliation of the reported figures to 
  the adjusted figures.

Group revenue driven by new revenue streams
Group revenue increased 5.3 percent to R41 774 million, mainly driven by a 58.3 percent increase in mobile 
service revenue. BCX's IT and Gyro's external revenue also contributed positively to the group revenue, with a growth 
of 6.2 percent and 24.2 percent respectively. Ongoing investment, enhanced management focus and broadband-led 
propositions underpinned our revenue growth. 

Notwithstanding the growth in new revenue streams, the fixed business continues to be negatively impacted by a change
in technology. Fixed voice and interconnection revenue declined 14.3 percent as customers migrate to newer technologies.

Underlying group EBITDA growth underpinned by sustainable cost management

Group EBITDA increased by 8.5 percent to R11.3 billion, with an EBITDA margin of 27.1 percent (FY2018: 26.3 percent). 
EBITDA improvement benefited from the revenue growth and our ongoing sustainable cost management. 

Direct costs which are associated with the mobile business increased 20.7 percent largely due to an increase in store 
footprint and, extension of distribution channels and an increase in dealers incentives to support the growth in 
subscriber base. The direct costs growth was much lower than the mobile service revenue growth of 58.3 percent. 

Our relentless focus on cost reduction continues, with operating expenses declining 1.4 percent due to a 12.5 percent
decline in headcount supported by our staff optimisation process. This was offset by the growth in maintenance costs 
to support the 28.7 percent increase in mobile sites by 1 142 sites in the year as we grow our mobile coverage and 
capacity.

Refer below for each business unit's segment performance. The detailed performance of each business unit is addressed
in the productive capital section below.

- R41.8 bn
  Group operating revenue driven mainly by the mobile business
  5.3% increase from the previous year
- R8.2 bn
  mobile service revenue 58.3% increase from the previous year
- R11.3 bn
  Group EBITDA 
  8.5% increase from the previous year
- EBITDA margin of 27.1%
- 722.4 cents per share
  Group HEPS 
  22.6% increase from the previous year 

Group HEPS benefited from higher EBITDA   
Reported HEPS increased 5.1 percent to 619.2 cents per share, mainly due to higher EBITDA. HEPS, excluding the impact
of VSP, VERP and section 189 cost, increased 22.6 percent to 722.4 cents. Reported BEPS decreased 2.4 percent. 
Excluding the impact of VSP, VERP and section 189 costs, BEPS increased 15.5 percent to 665.1 cents, benefiting 
from EBITDA growth. 

Group capital investment for future growth
Capital investment of R7.7 billion, with capex to revenue of 18.4 percent underpins growth. Mobile and fibre remain
key capex focus areas with good returns in mobile service revenue growth of 58.3 percent. The investment in FTTH
rationalised as we focus on areas showing a propensity for higher connectivity rates. Our FTTH connectivity rate 
improved to 38.4 percent - the highest connectivity rate in the market. We increased our investment in POTN which 
will future-proof the core network. This is the foundation for software-defined networks and network function 
virtualisation capability.  
                                                                         
                                                                March         March                 
                                                                 2019          2018     Variance    
Capex                                                              Rm            Rm            %    
Fibre                                                           1 216         2 112        (42.4)    
Mobile                                                          3 011         2 319         29.8    
Operations support system (OSS)/business support system                               
(BSS) programme                                                   223           294        (24.1)    
Network rehabilitation/sustainment                                261           303        (13.9)    
Service on demand                                               1 195         1 292         (7.5)    
Core network                                                    1 172           902         29.9    
Other                                                             207           131         58.0    
Telkom                                                          7 286         7 353         (0.9)    
BCX                                                               304           504        (39.7)    
Gyro                                                               60            29        106.9    
Other                                                                                               
Yellow Pages                                                       24            16         50.0    
VS Gaming                                                           -             7       (100.0)    
Total                                                           7 674         7 909         (3.0)    

Strong balance sheet to fund future growth
Telkom remains lowly geared with a net debt to EBITDA ratio of 0.8 times, despite net debt increasing 
to R8 813 million (FY2018: R6 870 million). Group cash balances declined to R1 428 million 
(FY2018: R2 527 million),mainly due to R566 million paid for VSP, VERP and section 189 costs. 

The growth in borrowings is in line with our strategy to fund capex through long-term debt as the 
group moves to an optimal capital structure.  

Balance sheet                                                              Restated                   
                                                                March         March                   
                                                                 2019          2018       Variance    
                                                                   Rm            Rm              %    
Bank and cash balances                                          1 428         2 527          (43.5)    
Current borrowings                                            (5 401)       (2 239)        (141.2)    
Non-current borrowings                                         (4 840)       (7 158)          32.4    
Net debt                                                       (8 813)       (6 870)         (28.3)    
Net debt to EBITDA (times)                                        0.8           0.7            0.1    

Free cash flow impacted by the payment of VSP, VERP and section 189 costs and working capital management
Free cash flow weakened to negative R32 million (FY2018: positive R473 million). This was due to an 8.2 percent
decrease in cash generated from operations before dividend paid, mainly impacted by the R566 million VSP, VERP 
and section 189 costs and a decrease in working capital. The deterioration in working capital was primarily due 
to the increase in contract assets. Excluding the impact of the VSP, VERP and section 189 payments, our cash 
flow would have increased by 12.9 percent to R534 million. 

Free cash flow                                                             Restated                   
                                                                March         March                   
                                                                 2019          2018       Variance    
                                                                   Rm            Rm              %    
Cash generated from operations                                  8 903        10 113          (12.0)    
Interest received                                                 441           310           42.3    
Finance charges paid                                             (847)         (722)         (17.3)    
Taxation paid                                                    (945)       (1 472)          35.8    
Cash generated from operations before dividend paid             7 552         8 229           (8.2)    
Cash paid for capital expenditure                              (7 584)       (7 756)           2.2    
Free cash flow                                                    (32)          473         (106.8)    
Add back: VSP, VERP and section 189 costs paid                    566             -          100.0    
Adjusted free cash flow                                           534           473           12.9    

Progress against medium-term guidance

                                    FY2019 - FY2021         FY2019 Actual        Medium-term guidance          
Operating revenue                  Mid-single digit               5.3%             Mid-single digit      
EBITDA margin                          24% - 27%                 27.1%                    n/a                
EBITDA growth                             n/a                     8.5%             Mid-single digit   
Capex to revenue                       16% - 20%                 18.4%                 16% - 20%            
Net debt to EBITDA (times)     less than or equal to one            0.8                   1 - 1.2             
Note: Excludes corporate action.
Based on initial IFRS 16 take on balances.

As business is evolving, the change in revenue mix has a dilutive impact on EBITDA margins. Management will now 
focus on growing absolute EBITDA going forward. The accounting changes IFRS 16 will have a dilutive impact on 
earnings while positively impacting EBITDA. IFRS 16 will significantly impact our balance sheet negatively 
particularly our net debt and net debt to EBITDA ratio and necessitated that we increase our net debt to 
EBITDA ratio.

Segment performance 

Inter-company revenue and transfer pricing were included to measure and assess performance 
and allocate resources.
                         Openserve   Consumer       BCX     Gyro     Other   Eliminations      Group    
Adjusted                        Rm         Rm        Rm       Rm        Rm             Rm         Rm    
March 2019                                                                                              
Revenue from                                                                
contracts with                                                              
customers                   16 940     19 214    19 580    1 169     2 015        (17 144)    41 774    
  Fixed                     16 940      8 265    10 432        -       169        (13 055)    22 751    
  Mobile                         -     10 949         -        -         -           (195)    10 754    
  Information                                                               
  technology                     -          -     8 919        -         -         (2 155)     6 764    
  Other                          -          -       229    1 169     1 846         (1 739)     1 505    
Cost of handsets,                                                           
equipment and                                                               
directories                      -     (2 959)   (2 121)       -      (244)           119     (5 205)    
Sales commission,                                                           
incentive and                                                               
logistical costs                (6)    (1 250)     (213)       -         -             12     (1 457)    
Payments to other                                                           
operators                     (954)    (1 958)     (729)       -         -            701     (2 940)    
Other income                   378        615       117        -       809         (1 200)       719    
Operating expenses         (10 066)   (12 632)  (13 394)    (484)   (2 518)        17 512    (21 582)    
  Employee expenses         (3 628)      (735)   (4 538)    (104)   (1 032)           (12)   (10 049)    
  Other operating                                                           
  expenses                  (1 553)    (7 990)   (7 071)     (79)     (274)        13 814     (3 153)    
  Maintenance               (2 413)    (2 087)   (1 041)     (25)     (446)         2 938     (3 074)    
  Marketing                    (24)      (458)      (63)       -      (390)           129       (806)    
  Impairment of                                                             
  receivables and                                                           
  contract assets              (19)      (416)       50       16        27            (42)      (384)    
  Service fees              (1 721)      (416)     (490)    (185)     (335)           213     (2 934)    
  Operating leases            (708)      (530)     (241)    (107)      (68)           472     (1 182)    
EBITDA2                      6 292      1 030     3 240      685        62              -     11 309    
EBITDA                            
margin (%)2                   37.1        5.4      16.5     58.6       3.1                      27.1
Capital expenditure          4 034      3 070       304       60       206                     7 674 
1 During the year we restated the prior year revenue by R1 357 million. Of this amount R656 million related to 
  Smart Office Connexion (SOX). The implementation of IFRS 15 also highlighted a prior year error of 
  R641 million relating to the recognition of Mobile CPE revenue to dealer stores and R60 million related 
  to the adoption of IFRS 15. These revenue adjustments led to a restatement of the prior year number from
  R41 018 to R39 661 million.
2 EBITDA as defined in the IFRS 8 segment note in the consolidated financial information and includes the
  pro forma adjustments. Refer below for the reconciliation of the reported figures to the adjusted figures.

FY2018 has been restated to reflect the revised measurement basis used by the chief operating decision
makers to measure the performance of the reportable segments in the current financial year.

                         Openserve   Consumer       BCX     Gyro     Other   Eliminations      Group
Restated                        Rm         Rm        Rm       Rm        Rm             Rm         Rm
March 2018
Revenue from                                                      
contracts with                                                               
customers1                  17 525     16 501    20 263      944     4 457        (20 029)    39 661    
  Fixed                     17 525      9 278    11 253        -        95        (13 446)    24 705    
  Mobile                         -      7 223         -        -         -           (155)     7 068    
  Information                                                                             
  technology                     -          -     8 843        -         -         (2 473)     6 370    
  Other                          -          -       167      944     4 363         (3 956)     1 518    
Cost of handsets,                                                                         
equipment and                                                                             
directories                     (1)    (2 163)   (2 051)       -         -           (196)    (4 411)    
Sales commission,                                                                         
incentive and                                                                             
logistical costs               (48)      (779)     (184)       -         -             76       (935)    
Payments to other                                                                         
operators                   (1 296)    (1 247)     (922)       -       (12)           871     (2 606)    
Other income                   345        807         3        -       769         (1 317)       607    
Operating expenses         (10 621)   (13 265)  (13 799)    (630)   (4 174)        20 595    (21 894)    
  Employee expenses         (4 145)    (1 003)   (4 777)     (59)     (693)             -    (10 677)    
  Other operating                                                                         
  expenses                  (1 754)    (8 493)   (6 940)       -      (423)        14 619     (2 991)    
  Maintenance               (2 615)    (2 162)   (1 060)    (146)   (2 497)         5 784     (2 696)    
  Marketing                    (14)      (370)     (125)       -      (246)            (8)      (763)    
  Impairment of                                                                           
  receivables and                                                                         
  contract assets                3       (438)      (53)     (15)     (139)             7       (635)    
  Service fees              (1 502)      (323)     (629)    (410)     (164)             -     (3 028)    
  Operating leases            (594)      (476)     (215)       -       (12)           193     (1 104)    
EBITDA                       5 904       (146)    3 310      314     1 040              -     10 422    
EBITDA                        33.7       (0.9)     16.3     33.3      23.3                      26.3    
margin (%)                                                                                            
Capital expenditure          4 728      2 359       504       29       289                     7 909    


PRODUCTIVE CAPITAL

Openserve
- FTTH connectivity rate increased to 38.4% up 7.7 ppts from FY2018
- EBITDA margin of 37.1% up 3.4 ppts from FY2018 
- We believe the scale and quality of our network is our primary value differentiator. Our strong footprint 
  and IP-based network create a unique holistic network. We are confident that improved cost-efficiency 
  initiatives and focused customer interactions will redefine South Africa's data connectivity market.
- Openserve was awarded the title 2018 Fixed Broadband Provider of the Year by MyBroadband

Openserve's revenue was resilient despite customers migrating to next-generation technologies at lower price points.
Despite pressure on revenue and a change in our revenue mix, EBITDA grew at a better rate than the previous years. 
This was enabled by, among others, our strategy to modernise the network to improve cost to connect and reduce 
cost to serve.

Performance overview
Openserve contained the revenue decline at 3.3 percent to R16 940 million (FY2018: R17 525 million), despite voice 
revenue decreasing by 15.8 percent. The decline in voice revenue was caused by migration of customers from legacy 
to next-generation technologies, and lower call termination rates. The negative impact was partially offset by fixed 
data revenue growth of 7.3 percent, mainly due to next-generation fibre and ethernet products, which grew by 
40.3 percent to R1 207 million. Fibre to the base station increased by 3.3 percent to 7 018 base stations as 
mobile operators expand their networks. The demand for ethernet services from enterprise customers increased 
by 55.6 percent to 37 476 service connections. Our focus on homes connected to improve returns is being realised. 
The FTTH connectivity rate increased from 30.7 percent in the prior year to 38.4 percent, slightly below our 
target of 40 percent. 

Openserve upgraded the fibre broadband portfolio minimum access speed to 10 Mbps to enable faster broadband 
access speed and increase data consumption. Openserve also reduced the effective price on IPConnect by 
9.1 percent by providing additional capacity to customers. This led to an increase of 11.6 percent on the 
average daily data usage for FTTH customers in the fourth quarter. This is in line with our commitment to 
bring down the cost to communicate.

EBITDA improved 6.6 percent to R6 292 million, driven by a 5.2 percent decrease in operating costs as we continue to
extract operational efficiencies by modernising our network. The migration from legacy to next-generation technology
contributed to a 27.8 percent reduction in assurance visits, which decreased our subcontractor cost. Our cost optimisation
programme included employee productivity and operational efficiencies, which contributed positively with a 12.5 percent
decrease in employee costs. 

The EBITDA margin increased by 3.4 percentage point basis to 37.1 percent, despite the dilution impact of the change in
revenue mix.

Modernising the network
Our capital investment focuses on modernising the network through the POTN, which will future-proof the core network
and enable data growth across access, aggregation and core networks. This is the foundation for software-defined 
networks and network function virtualisation capabilities.  

Our investment in the national fibre portfolio increased our footprint by 6 400 km of fibre, with a total fibre
network of 163 800 km. This grew ethernet services on the network by 13 400 connections (FY2018: 7 700) to 37 400. 
The associated capital investment reduced by 7.4 percent.  

We are optimising our capital investment through redeploying next-generation broadband equipment from areas recently
covered with fibre, to areas serviced with legacy broadband equipment. 

Transforming service delivery
Customer experience is an integral part of our service delivery strategy. We implemented a fully integrated workforce
dispatching tool, which improved our service delivery. The tool uses real-time scheduling to reduce travel time and
improve productivity efficiency. 

The service delivery transformation journey decreased redispatches by 21.4 percent, improving our net promoter score
(NPS) by 2.9 percent to 48.9 percent. 

Our data analytics provides accurate and predictive information that facilitates a proactive approach to managing our
network and meeting customer expectations.

Telkom Consumer
- Telkom Consumer operating revenue: R19 214m an increase of 16.4%
  due to accelerated mobile data revenue growth
- Active mobile customers increased by 85.9% to 9.7m
- Mobile service revenue up 58.3% to R8.2bn
- EBITDA grew exponentially from (R146m) to R1030m
  due to the growth in net operating revenue, ongoing cost management and cost efficiencies

Telkom Consumer's performance was driven by the mobile business acceleration, underpinned by our successful data-led
value propositions. We are migrating customers from selected traditional fixed-line to wireless technologies, such as LTE
and fibre. We continued to invest in the wireless network and started implementing the roaming agreement and facilities
leasing agreement between Telkom and Vodacom. We extended distribution channels and increased our store footprint to
support the increase in demand for mobile services. 

Performance overview
Telkom Consumer's operating revenue increased by 16.4 percent to R19 214 million (FY2018: R16 501 million). 
This is mainly due to accelerated mobile service revenue of 58.3 percent to R8 155 million (FY2018: R5 151 million). 
 
Mobile
Our data-led proposition and customer value management underpinned growth in subscriber base and ARPUs. Active
subscribers increased by 85.9 percent to 9.7 million, with a blended ARPU stable at R100.

Data
Our broadband-led strategy is yielding positive results. Data revenue increased by 34.7 percent to R8 913 million,
mainly due to mobile data revenue growth of 60.7 percent to R5 917 million. Our broadband customer base, which includes
ADSL, VDSL, LTE and fibre, increased by 8.4 percent to 1.7 million customers. This was supported mainly by new to
franchise subscribers and the migration of customers to new products, as well as the Summer and Chinese marketing 
campaigns. We expanded our innovative product offering through the unlimited home product suite. It offers a premium 
service with uncapped internet for data-hungry households, and an unlimited Telkom-to-Telkom calling plan. Coupled 
with this, we introduced the "in home entertainment" offer. This bundled the LIT box media streamer to unlimited 
home bundles to stream media to a television screen, for example ShowMax, Netflix and YouTube.

Telkom successfully ran the "Summer of More" campaign, which enhanced customer value propositions by providing
additional data and streaming value. This led to the highest new subscribers on our flagship FreeMe product suite. 
By including smaller FreeMe bundles, the offering is more accessible to the mass market and significantly increased 
the monthly sales of FreeMe bundles. Telkom partnered with YouTube to include free promotional streaming data for 
customers as part of the FreeMe bundles, which increased accessibility. 

Pre-paid       Pre-paid subscribers grew by 109.3 percent, adding net additions of 4.1 million subscribers to
segment        7.8 million customers. Despite the significant growth in subscribers, ARPU increased by 
               19.8 percent to R71.                     

Post-paid      The customer base increased by 26.8 percent to 1.9 million subscribers. ARPU marginally declined 
segment        to R186 as we drive increased value through our deals.    

Content and gaming 
Our various LIT content offerings, such as video, music and TV streaming, address the lifestyle and entertainment
needs of our customers. We continuously build on the LIT value proposition. We offer mobile streaming bundles, which 
enable customers to source cost-effective streaming data in conjunction with LIT content partners. 

We continue to strengthen relationships with our content partners. We entered into a partnership agreement with
Netflix - a first for Netflix with a South African telecommunications company. The agreement makes it easier and more
affordable for customers to consume streaming services across the network. 

Our entry into the gaming arena fortified our standing in the content space through heightened gaming possibilities
through our largest African e-sport tournament management capability, VS Gaming. We hosted the first South African 
EA FIFA World Cup qualifier event in May 2018. This increased the access and participation of South Africans in 
e-sports, locally and globally.

EBITDA improvement
EBITDA swung from a loss of R146 million in the prior year to R1 030 million in FY2019, benefiting from the strong
growth in revenue and ongoing cost management.

The continued growth in mobile is now beginning to achieve scale. The deterioration of our copper base technology
is being more than offset by a strong double-digit growth in the mobile business, resulting in a positive revenue growth
of 16.4 percent at the consumer level. Our net operating revenue percentage continues to improve as we manage our
variable cost effectively. This is driven by an increased network footprint that mitigates the roaming growth, as well as
favourable termination rates coupled with a reduction in internal connectivity costs linked to the old technology copper
business. As we drive volumes of traffic through the network and reduce our unit marginal costs, we grow the mobile network
footprint. This translates into a more efficient operating expenses structure as we strive to offer the lowest cost per
bit on the mobile network. This is evidenced by the strong value proposition deals that we take to market. 

Capital investment 
Telkom Consumer continued its 4G-driven network expansion programme to support growing customer numbers and data
traffic. We increased capital investment by 30.1 percent to R3 070 million, increasing base stations by 28.7 percent 
to 5 116 base stations, 3 438 of those base stations are 4G, an increase of 47.4 percent compared to the prior year. 
We started refarming a portion of our 2 100 MHz spectrum to LTE, following the successful refarming of the 1 800 MHz 
spectrum for smartphones. The strategic intent of focusing spectrum resources towards 4G contributed to smartphone 
subscribers increasing by 91.8 percent to 5.3 million. 

We entered into a roaming agreement and facilities leasing agreement with Vodacom, to provide a seamless roaming
experience across all their mobile sites. The roaming agreement was implemented in phases starting in the Limpopo region,
and is 80.0 percent complete. Work commenced in other regions. The facilities leasing agreement allows Telkom to use its
roaming partners' passive equipment (towers, antennas and shelters) to accelerate its network build. This, together with
our own capital deployment, facilitates an efficient capital and operational expenditure profile, while accelerating time
to market.

Customer experience
Service delivery remains our key focus and we are determined to achieve more across our fixed and mobile operations. 
Continuously evaluating customer feedback guides our approach and actions and we seek to constantly improve the 
customer experience. We realised significant benefits, including improving our composite NPS and halving the number 
of repeat callers in certain areas of business.

How Telkom Consumer is improving the customer experience:
- expanding our network capital investment of R3 070m
- improved data traffic through 5 116 base stations
- Smartphone subscribers increased by 91.8% to 5.3m

BCX
- Improved IT external revenue by 6.2% to R6.8bn
- BCX restructured the business operations into two main service offerings - telecommunications and 
  IT solutions. This will improve focus and ensure we service customers effectively. We appointed a chief revenue 
  officer to manage BCX's go-to-market model that is based on customer segmentation and dedicated channels to serve. 
  The initial feedback from customers is positive and the model has led to improved customer experience as 
  demonstrated by a 4 points improvement in NPS and 11 points improvement in quality of service measurement.
- B-BBEE rating now Level 1 up from level 3
- EBITDA margin of 16.5% due to optimised operating costs

BCX has gone through a restructuring process with an aim to stabilise the business by arresting the declining
financial performance, simplifying the structure to create efficiencies and reducing the organisation's cost to serve. 
The restructuring process is gaining traction evidenced by better financial performance in the second half of the 
year where the rate of decline in revenue improved to 1.8 percent compared to 4.9 percent decline in the first half 
of the year, and EBITDA increased by 46.0 percent compared to a decline of 36.5 percent in the first half of the year.  
 
Performance overview
Revenue declined 3.4 percent to R19 580 million, a decline of R683 million compared to a R1 billion revenue decline 
in the prior year. The decline in revenue is primarily due to a 13.3 percent decline in fixed voice revenue, a 
deteriorated performance from small and medium-sized enterprises (SMEs) and continued delays in spending from 
the public sector. 

Our strategy to reduce fixed voice customer churn and migrating customers to next-generation voice solutions has 
started to bear fruit. In the second half of the year, next-generation voice revenue increased by 28.3 percent 
compared to 56.9 percent in the first half of the year and fixed voice revenue in the second half of the year 
declined by 10.5 percent compared to 13.4 percent in the first half of the year.

However, IT revenue delivered solid growth of 6.2 percent from external customers, underpinned by good performance
from retail and financial services sectors despite the poor economic conditions. Overall, IT revenue increased by 
0.9 percent impacted by the reduction in Telkom group IT charge as well as hardware and software sales. 

Data revenue decreased by 3.3 percent, driven by an increase in next-generation data revenue of 44.0 percent as data
demand continues to surge. However, this was offset by the decline in traditional data revenue of 19.0 percent, due to
convergence from legacy ADSL and diginet to fibre. We will continue to focus on migrating customers from diginet to
metro-ethernet. 

EBITDA declined 2.1 percent to R3 240 million with an EBITDA margin expanding from 16.3 percent to 16.5 percent 
negatively impacted by the continued decline in traditional business which are high-margin businesses. This was 
partially offset by the optimisation of operating costs through renegotiations of supplier contracts, consolidation 
of offices, containing discretionary expenditure and using robotics to improve some processes. In line with our 
employee optimisation programme, towards the end of the year, we reduced permanent employee numbers by 13.4 percent 
to 5 782. We expect the savings from this programme to come through in the next financial year. The employee
optimisation programme was managed to ensure that daily operations were not disrupted, and key skills were retained.

Business portfolio review
In the prior year, BCX initiated a review of its business portfolio identifying some of the African
subsidiaries as assets held for sale and integrating South African subsidiaries into One BCX to drive efficiencies 
within the company. To this end, BCX Nigeria, Tanzania and SOX group are held for sale. The remaining international 
subsidiaries are retained to have presence across borders. 

The integration of the South African subsidiaries into One BCX is progressing according to plan with only two subsidiaries
which will be divisionalised in the next financial year. 

How we are improving the customer experience at BCX:
- customer-centric focus drives innovation
- digital transformation
- automated client surveys
- problems resolved within 1 month

Client experience
Our clients are at the core of our business and we are driving innovative ways to redesign client experience. 
The goal is to position BCX as the most recommended digital transformation partner, and to repurpose it to be  
more customer centric.  

We implemented initiatives to improve our NPS. These included a robust, automated solution that feeds client survey
responses to the account manager within 24 hours. This starts a closing-of-the-loop process with clients to resolve their
pain points. A total of 85 percent of client pain points highlighted were resolved within one month, with the remainder 
within two months, compared to the previous six-month turnaround. This is testament that BCX values and responds 
to client feedback.

A client experience risk platform for each vertical owner, that is financial services, retail and public sector, earmarks
accounts needing high care. These accounts require targeted interventions to re-establish trust and convert clients to
become promoters of BCX. We closely monitor high-risk clients to ensure retention and to identify upsell and cross-sell
opportunities.

GYRO
- Gyro operating revenue of R1 169m 
  23.8% increase driven by our mast and tower portfolio
- EBITDA margin increased from 33.3% to 58.6% due to revenue growth and active cost management 
  increase of 25.3 ppts
- Mast and tower revenue increased 35.4% to R930m
- Gyro manages Telkom's property portfolio, which consists of 1 332 properties, comprising exchange and switch, 
  office, client service centre, centre for learning buildings, radio transmission sites and residential dwellings.

Gyro focused on optimising the mast and tower portfolio, undertaking development planning for selected properties, and
optimising the group's property-related expenses. We established a solid foundation for revenue opportunities and asset
value enhancement going forward. The mast and tower portfolio generates the bulk of our external revenue, as external
rental income will only be realised as properties are redeveloped.  

Revenue increased 23.8 percent to R1 169 million, mainly driven by our mast and tower portfolio, underpinned by
revenue enhancement initiatives in the tower portfolio.  

EBITDA increased by 118.2 percent to R685 million and the EBITDA margin expanded by 25.3 percentage basis points 
to 58.6 percent, driven by revenue growth and active cost management. 

Mast and tower portfolio
Our mast and tower revenue increased by 35.4 percent, primarily from 1 380 multi-tenanted towers. We are removing 
redundant equipment from 120 of these towers to make rental space available for new tenancy. We assessed the 
entire portfolio for suitability of mobile network operator multi-tenancy. As a result, we introduced 2 000 
additional towers to potential tenants. We are aggressively marketing these sites to our major tenants and 
have received positive interest. 

The tower portfolio is anchored by Telkom Mobile as it penetrates new markets and enhances its 4G network coverage. 
We have a new tower build programme for 2 000 sites over the next three years, underpinned by Telkom Mobile's demand for
new sites. We established supplier panels for site permitting and acquisitions, tower manufacturing and construction for
expeditious execution of the build programme. In line with the evolving technology landscape and customer requirements,
Gyro has developed a small cell offering for 4G network augmentation and 5G rollout preparation.  

Gyro will establish adjacent revenue streams from property developments as part of its core objective of unlocking
value in the tower and property portfolios.

Property portfolio
We are assessing each of the group's 1 332 properties to determine the best use. Development planning is underway for 
selected properties with development potential. We conducted market research for most of the selected properties to 
identify supportable property segments per site. We continue adding suitable properties to the development pipeline 
and commence with the rezoning and development planning process to prepare the properties for redevelopement. 

We continued rationalising the Telkom property portfolio and started with Telkom regional centres in major cities.
Telkom business units will be consolidated into regional offices and operational/warehoused building centres. This will
lead to greater productivity and efficiencies among business units and will optimise occupancy expenses at the regional
level.  

While regional centres are being prepared for office space, warehouse and operational consolidation, Gyro focused on
reducing third-party rental expenditure where Telkom properties offer suitable alternative accommodation. We identified
leases for BCX, Yellow Pages and Openserve in Cape Town, Durban, Port Elizabeth and Johannesburg that can be replaced
with more cost-effective tenancy in Telkom properties. This initiative is at various phases of completion and the 
financial benefits will be realised from the next financial year. This initiative will be extended to other major cities. 

We are decommissioning 62 exchange properties that are no longer fit for operational purpose. We will sell
decommissioned properties if they do not meet development criteria or other strategic uses. We continue to aggressively 
assess buildings and properties in the portfolio to identify assets that are no longer required for operational purposes 
that we can either redevelop or sell, thereby reducing occupancy costs while generating revenue.

Yellow Pages (known as Trudon)
How we have evolved our business:
- optimised underlying cost base
- implemented a new operating model
- We added value for clients with our enhanced online platform which contributed to
  - 175% increase in users
  - 908 354 customer visits
  - 93% increase in organic page views
  - reduced operating expenditure and increased EBITDA by 7%

Yellow Pages continued to evolve from a traditional print directory publisher to a technology-enabled organisation
that provides a range of digital-centric marketing and e-commerce services to customers.  

We stabilised the business by optimising the underlying cost base, implementing a new operating model and
enhancing the current online Yellow Pages platform. The new operating model implementation, including the employee
reorganisation process, is complete and has unlocked further operating cost-efficiency opportunities. 

Print revenue continued to be under pressure due to churn of high-value subscribers away from the traditional printed
directories, combined with churn on the Internet Yellow Pages product due to the lack of value associated with 
the low traffic volumes to the site. To address the churn and provide increased value to customers, we relaunched 
the online Yellow Pages platform in September 2018. This has contributed to the 175 percent increase in users 
since March 2018. We have 908 354 customers that visit the site monthly. Organic page views increased by 93 percent 
to 2.1 million impressions per month.  

We continue to expand our third-party channels, including the pilot of the tied agency model. This will support the
growth of digital marketing solutions in traditionally underserviced areas and improve the simplicity, quality and 
pricing of product offerings. We introduced new bundles to simplify the decision-making process. Customers can now 
choose a bundle, which includes a range of products, from those suited to start-up businesses, that require a basic 
internet presence, to more mature organisations looking to drive traffic to their website or establish an e-commerce 
capability. 

EBITDA for the period, excluding the impact of VSP, VERP and section 189 costs, increased by 7 percent. This was achieved 
through the 31 percent reduction in operating expenditure which offset the 20 percent decline in net operating revenues 
due to loss in high-margin print revenues.

We will continue developing and enhancing the online Yellow Pages platform with new functionality, such as a customer
dashboard that will be launched during the next financial year. This will allow customers to purchase selected digital
marketing products via the self-service portal and allow them to market their services to other businesses on the 
Yellow Pages platform.

Yellow Pages will be reported as part of the Telkom Small and Medium Business unit from the next financial year.  
It will be leveraged to support customer retention and provide integrated product offerings to SMEs.

INTELLECTUAL CAPITAL

The increasingly inter-connected world influences how technology interacts within businesses, and with their customers 
and users. A customers' ability to utilise and consume services across multiple channels is becoming a common requirement 
and changes how we implement technology and IT solutions.  

- Our central focus is the customer
- We are transforming our operating model for IT put the customer experience first 
- We have evolved our OSS/BSS systems to enable a better client experience

IT and technology are pivotal in enabling relationships with our customers. We are transforming our IT operating model 
to ensure we put customers and their experience with us at the centre of our IT transformation journey. Digitilisation 
across multiple platforms forces higher dependency on IT and requires a relook at our customer journeys and process 
flows. We successfully concluded the prior year projects on workforce management, by retiring solutions in this 
space, and various security and customer service-related initiatives, such as improved access to the geographic information
system platform. We continue to implement internal projects such as Office 365 and SAP-based modules. Our endeavour to
move towards comprehensive digital platforms continues and we achieved multiple milestones across self-service apps, 
online portal upgrades and multiple new functionalities like zero-touch options across customer interaction points. 

Our focus remains on transforming the OSS/BSS landscape through effective fulfilment, assurance and billing across 
each business unit, and improved enterprise IT solutions, which support the group. This is in line with the impact 
of a software-defined network and network field virtualisation, enabling better network management and system 
availability, which enables a better customer experience.

This overarching focus to enable better service delivery relies on
5 key transformation drivers:

1. Digitalisation and     Overhaul business processes to conform to intuitive interfaces,        
   process enablement     near real-time fulfilment, personalised treatment and service          
                          demands through digitilisation                                           
2. Reliable service       Deliver faster and better services by utilising underpinning           
   delivery               technologies and sustainable and reliable IT infrastructure            
3. Outcome-based          Deliver end-to-end, outcome-based services driven by                   
   delivery               harnessing, creating and maintaining customer and business value       
4. Flexible fulfilment,   OSS/BSS that enable dynamic product catalogue and advanced             
   assurance and billing  service orchestration tools to enable a digital abstraction of data    
   solutions                                                                                           
5. Improved cost          Prioritise profitable and consumption-based services across            
   structures             all IT transformation projects and partnerships to improve cost        
                          efficiencies                                                           

Telkom is cognisant of its obligation to manage information and cybersecurity threats. The group is required to comply
with legislation and regulations such as the Protection of Personal Information Act and the Payment Card Industry Data
Security Standard. We continuously mitigate these potential risks. We operate within a mature and compliant ISO 27001
information security management system environment. We continue to implement our Information Security Management programme
and drive upgrades and enhancements to our multi-pronged approach towards information and cybersecurity. This includes
effective detection and protection against various cyberattacks and cybercrime. We continue to review and enhance our
information and cybersecurity assurance capability to monitor the effectiveness of the information security management
initiatives. We create greater awareness among employees and our customers through the various programmes.

HUMAN CAPITAL

Having the right talent, in the right place, at the right time is critical to our success, and delivering on our
vision. The group employs, supports and develops people to ensure we have the right capabilities, commitment and 
enthusiasm to achieve our strategic objectives. 

Telkom's focus areas remain transformation and talent development. The total permanent group workforce as at 
31 March 2019 is 15 296 compared to 17 472 in FY2018. The decrease in permanent workforce was primarily 
due to VSP and VERPs offered and the section 189 process. The racial breakdown of permanent employees within 
the reporting year comprised of 64 percent black South Africans, 33 percent white South Africans and 3 percent 
non-South Africans. In total, 35 percent of our external recruitment was made up of women. It remains a challenge to 
realise gender equality and female representation which aligns to the challenges of the broader ICT sector. 
Within the group, women represent 31 percent of our employee base. Telkom is committed to increasing female 
representation and transformation, confirmed by our female promotion rate of 54 percent, which is higher than 
the representation rate.

Our external recruitment points to Telkom's strong resolve to hire in accordance with our transformation objective,
and 84 percent of all external hires were black. Our top management black representation increased from 
62 percent to 100 percent. 

Our enduring talent management framework enables actionable career development plans aligned to personal aspirations
and business needs. Telkom focuses on developing high-potential talent in line with specific business needs and invested
R11 million in talent and skills development programmes. Programmes include Top Flight, Step Up, Female Leadership
Development and two new programmes, Traction and Digital Leadership Development. The group spent R293 million on 
employee training and development and each employee received an average of 14 hours of training (FY2018: 17 hours).

Following on from the Bright Young Minds programme and the succeeding Future Minds programme, 12 young talented
individuals were successfully positioned in various permanent roles across the group. Added to this, other 
programmes continue to attract, develop and employ young talent.

Telkom had 848 learnerships and internships (FY2018: 703) active during the year. Candidates comprise 46 percent
female (FY2018: 56 percent), 100 percent black (FY2018: 100 percent) and 27 percent learners with disabilities 
(FY2018: 13 percent). Learnerships were aimed at unemployed learners as a talent pipeline in line with future 
talent requirements, and internships were aimed at unemployed learners enabling them to gain meaningful work 
experience.

For talent mapping and succession planning purposes, all management and employees were reviewed and assessed against
predetermined criteria. To address potential challenges and minimise talent risks for the group, the talent mapping
findings were used to inform the identification of successors and to provide input into the actions required. 

The Top Flight and Step Up programmes were launched in June 2018 to develop highly educated, high-potential leaders.
There are 18 and 23 executives on the programmes respectively. Individual key challenges and development needs are
identified by the participants to construct their development journey for the year. Each participant has a personal 
coach and will receive coaching sessions as part of their development. Three of the 23 executives were promoted 
during the year.

SOCIAL AND RELATIONSHIP CAPITAL

By focusing on social and relationship capital, we contribute to national and global development goals, comply with
legislation, drive our business strategy, create shared value, promote transformation and maintain our social 
licence to operate. BCX B-BBEE rating improved from level 3 to level 1.
 
Transformation is a key strategic pillar in our business strategy. We implemented several strategic initiatives to
drive transformation across the group. Two governance committees, the broad-based black economic empowerment (B-BBEE) 
forum and the skills development forum, developed the B-BBEE improvement plan with targets for implementation. These 
forums are mandated to advocate transformation as a strategic imperative when making business decisions. 

Telkom applied to the Department of Trade and Industry for the government shareholding to be classified as a B-BBEE
facilitator status. The application proved successful and was gazetted on 7 May 2019. Although we believe this 
conversion will contribute significantly to our growth strategy, we continue to investigate other avenues to 
improve the ownership element.

FutureMakers was launched in May 2015 as Telkom's Enterprise and Supplier Development programme. It demonstrates our
commitment to SME development to drive our beyond-compliance approach to develop black-owned businesses in the
information and communications technology (ICT) sector. This initiative is aimed at enhancing market access opportunities, 
driving ICT innovation, and fostering inclusive participation of majority black-owned ICT businesses in Telkom's supply 
and value chain. SMEs that are identified for inclusive procurement are supported by FutureMakers through incubation and
business development support. During the year, BCX through FutureMakers invested in the incubation of innovative 
start-ups. Openserve and Consumer through FutureMakers invested in business development support for the 
Independent Field Technician (IFT), Consumer Dealer and Subcontractor programmes. 

The IFT programme increased from three pilot companies that consisted of four qualified technicians in 2015, to 
45 companies in FY2019. Total cumulative procurement spend was R192 million in FY2019. The programme offers commodity 
services such as ADSL, fibre and jointing services in support of qualifying black small business development. 
The programme created 804 jobs to date.

The Consumer Dealers' programme consists of 25 dealers, including 3 flagship dealers and 6 multi-dealers, 23 internet
cafes, 3 events companies and 1 debt collector. 

The programme aims to leverage SMEs as a channel to increase the distribution footprint, contributing to inclusive
procurement, access to connectivity in underserviced areas, and promoting job creation. 

The Innovation programme has R30 million cumulatively invested through grant funding and connectivity, of which 
R10 million was invested in FY2019. There are 76 enterprises incubated in emerging technologies from ideation to
commercialisation in FY2019. The programme aims to incubate, accelerate, and invest in enterprises that develop solutions 
in areas such as the Internet of Things, big data analytics, artificial intelligence, smart cities and cybersecurity.

Telkom Foundation invested R78.3 million (FY2018: R57.2 million) including administration costs, of which 
R54.5 million was invested in education and R15.8 million in social development programmes. The three-phased Telkom 
Foundation strategy supports learners, enabling their economic participation in the ICT sector and assists the 
youth to grasp opportunities.

NATURAL CAPITAL

Measuring and managing our environmental impact is important for the planet and the communities in which we work, 
and essential for the financial sustainability of our supply chain and our business. 

The ICT industry is categorised as a low environmental impact sector. The most significant environmental impact of our
operations is e-waste, energy use and the related carbon emission in our network. Our focus is on minimising Telkom's
energy intensity and carbon footprint by improving the energy efficiency of our activities.

Telkom has participated in the CDP (formerly the Carbon Disclosure Project) for the past seven years. This provides
feedback on how well Telkom manages energy and greenhouse gas inventory to reduce the group's environmental impact within
our operational boundary. We disclose our greenhouse gas (GHG) emissions to demonstrate our commitment as a responsible 
global citizen to the legal obligations under the United Nations Framework Convention on Climate Change and its Kyoto 
Protocol. Our commitment to reduce GHG emissions safeguards our long-term sustainability and equips us to effectively 
respond to regulatory and policy changes.  

To minimise the increases in energy use and carbon emissions, we continue to roll out energy-efficient measures and
technologies, and we also have water-saving initiatives. These include:

Smart lighting    Installation of smart control technologies (motion sensors and daylight                
controls, LED     switches), LED lighting and smart meters at our high energy consuming sites            
lighting roll     so that lights are off when not in use. The benefits of these projects are to          
out and smart     enhance and improve control of energy costs and consumption, benchmarking              
metering          of facilities' electricity usage, sustainability reporting and effective utilities     
                  management. The implementation of these projects is planned to be                      
                  completed in FY2020.                                                                  

Telkom Park       Implementing an energy management system (EnMS) at Telkom Park to achieve ISO 50001                     
energy            certification: The EnMS will enhance the adoption of best            
management        practices and sustainable energy savings.                                              
system                                                                                                   

Resource          Implementing a Resource Efficiency programme at five of our priority sites             
efficiency        (Rosebank exchange, New Doornfontein exchange, Braamfontein exchange,                  
assessments       Germiston exchange and Telkom Park). The programme focuses on energy                   
                  efficiency, sustainable water uses and waste management.                               

The increase of e-waste is a source of income for waste collectors and handlers. We sell our cabling to a leading
e-waste recycling organisation, which processes the cabling by using environmentally and socially responsible techniques
without chemicals or burning. We sell copper recovered from the recycling process to local and international markets. 
This sensitive, labour-intensive process provides employment and empowerment for an Eastern Cape rural community, 
where 22 families rely solely on this project as a source of income.

Outlook
- Year end with a solid performance
- Accelerate the migration of customer to next-generation technologies
- It is imperative to continue investing in key growth areas in line with our strategy to 
  ensure that we win against our peers
- Growth pillars
  - Mobile
  - Information technology
  - Next-generation data 
  - Mast and tower
- Roaming agreement and facilities leasing agreement to accelerate the network deployment
- Disciplined approach to
  - allocating sources of capital
  - considering our investment strategy
  - return to shareholders
  while maintaining a healthy balance sheet
- Telkom will host a Capital Markets Day on 29 May 2019

The group ended the year with a solid performance despite the pressures from the regulatory landscape, a weak economic
environment, a decline in fixed voice revenue and customers migrating to next-generation technologies at lower margins.

Looking forward, we expect to accelerate the migration of customers to next-generation technologies in line with our 
strategy focusing on retaining customers. It is imperative to continue investing in key growth areas in line with our 
strategy to ensure that we win against our peers. 

The capex investment to date is already yielding positive results with the growth in our new generation revenue 
streams driving growth for the group. We expect the trends to continue with new revenue streams driving growth 
for the group. 

We will continue to manage the decline in traditional revenue by proactively migrating customers from traditional 
to new generation revenue and partnering with over-the-top players to provide data-led propositions to 
our customers.

To support the migration strategy, we intend to accelerate our investment in our network for coverage and capacity and
continue to utilise our LTE coverage (4G) spectrum efficiently, as the bulk of the traffic is on our 4G network. During
the year, we entered into a roaming agreement and facilities leasing agreement that will further strengthen our ability
to accelerate the network deployment. The new roaming agreement will provide us with deep passive sharing, seamless
roaming, access to 4G and enhanced high value location coverage. This will enable us to provide improved customer
experience and allow us to extend our coverage footprint. Our focus is to retain customers as customers become 
technology agnostic. 

We are mindful of the migration from traditional to new revenue streams at lower margins with increased cost to serve.
As a result, we are embarking on a structured and focused sustainable cost management program to rebase the cost
structure to improve absolute EBITDA growth and ensure that we are sustainable on a long-term basis. 

We are renewing our capital framework to ensure that we apply a disciplined approach to how we allocate the various 
sources of capital, taking into account our continued investment strategy, return to shareholders, while 
maintaining a healthy balance sheet.  

Capital Markets Day
Telkom will host a Capital Markets Day on 29 May 2019. A webcast link with live streaming and all presentations of 
the day will be made available on the website at www.telkom.co.za/ir at 08h00 (South African standard time).

Dividend policy remains unchanged
Our policy is to pay an annual dividend of 60 percent of headline earnings, with an interim dividend of 40 percent 
of interim headline earnings.

Declaration of dividend
In line with our dividend policy, the board declared a final ordinary dividend number 24 of 249.40317 cents per share.
This follows an interim dividend of 112.14144 cents per share declared in the interim results. This takes the annual
dividend for FY2019 to 361.54461 cents per share (FY2018: 355.08846 cents per share).  

The declared dividend is payable on Tuesday, 18 June 2019 to shareholders recorded in the register of the company at
close of business on Friday, 14 June 2019. The dividend will be subject to a local dividend withholding tax rate of 
20 percent which will result in a net final dividend of 199.52254 cents per ordinary share to those shareholders not 
exempt from paying dividend withholding tax. The ordinary dividend will be paid out of available cash balances.

The number of ordinary shares in issue at date of this declaration is 511 140 239. Telkom SA SOC Ltd's tax reference
number is 9/414/001/710.

Salient dates with regard to the ordinary final dividend 
Declaration date                         Monday, 27 May 2019        
Last date to trade cum dividend        Tuesday, 11 June 2019      
Shares trade ex-dividend             Wednesday, 12 June 2019    
Record date                             Friday, 14 June 2019       
Payment date                           Tuesday, 18 June 2019      

Share certificates may not be dematerialised or re-materialised between Wednesday, 12 June 2019 and 
Friday, 14 June 2019, both days inclusive.

On Tuesday, 18 June 2019, dividends due to holders of certificated securities on the South African register 
will be transferred electronically to shareholders' bank accounts.

Dividends in respect of dematerialised shareholders will be credited to shareholders' accounts with 
their relevant central securities depository participant or broker.

OPERATIONAL DATA
                                                          March         March     Variance    
Subscribers                                                2019          2018            %    
Broadband subscribers                                                                         
Fixed broadband subscribers1                            847 650       981 176        (13.6)    
Mobile broadband subscribers                          6 377 056     3 626 527         75.8    
Fixed subscribers                                                                             
Closer subscribers                                      718 968       790 207         (9.0)    
Internet all access subscribers2                        507 172       572 402        (11.4)    
Fixed access lines ('000)3                                2 267         2 678        (15.3)    
Revenue per fixed access line (Rand)                      4 545         4 703         (3.4)    
Fixed voice ARPU                                          351.8         360.8         (2.5)    
Fixed broadband ARPU                                      204.6         190.3          7.5    
Managed data network sites                               43 996        47 059         (6.5)    
Mobile subscribers                                                                            
Active mobile subscribers4                            9 680 725     5 207 876         85.9    
  Pre-paid                                            7 807 255     3 729 943        109.3    
  Post-paid                                           1 873 470     1 477 933         26.8    
ARPU (Rand)                                               99.90         98.19          1.7    
  Pre-paid                                                71.44         59.62         19.8    
  Post-paid                                              186.08        191.90         (3.0)    
Pre-paid churn (%)                                         57.2          51.6          5.6    
Post-paid churn (%)                                        13.1          12.0          1.1    
Blended churn (%)                                          48.7          40.4          8.3    
1 Includes xDSL and FTTH lines of which 6 134 (FY2018: 6 927) are internal lines
2 Includes Telkom Internet ADSL, ISDN and WiMAX subscribers
3 Includes copper voice and broadband, ISDN and FLLA. Excludes Telkom internal lines
4 Based on a subscriber who has participated in a revenue-generating activity within the last 90 days

                                                          March         March     Variance    
Volumes                                                    2019          2018            %    
Fixed broadband data volumes (terabytes)              1 023 252       848 314         20.6    
Mobile broadband data volumes (terabytes)               379 641       191 813         97.9    
Total fixed-line traffic (millions of minutes)           10 707        12 028        (11.0)    
Network                                                                                       
Ports activated via MSAN access                       1 467 984     1 536 133         (4.4)    
Fibre to the home                                       430 659       356 684         20.7    
Fibre to the cabinet                                  2 390 235     2 237 057          6.8    
Mobile sites integrated                                   5 116         3 974         28.7    
LTE sites integrated                                      3 438         2 333         47.4    
Active fibre connectivity rate (%)                         38.4          30.7          7.7    
Group employees5                                         15 296        17 472        (12.5)    
  Telkom company employees                                9 202        10 143         (9.3)    
  Consumer                                                1 105         1 370        (19.3)    
  Openserve                                               8 097         8 493         (4.7)    
  Corporate Centre                                          339           280         21.1    
BCX group employees6                                      5 782         6 675        (13.4)    
Yellow Pages group employees                                216           444        (51.4)    
Gyro employees6                                              96           210        (54.3)    
5 Based on number of group permanent employees                                                 
6 132 Gyro employees were transferred to BCX                                                

FINANCIAL PERFORMANCE
Pro forma condensed consolidated provisional annual statement of profit and loss*
                                                       Adjusted      Restated                 
                                                          March         March                 
                                                           2019          2018                 
                                                             Rm            Rm            %    
Revenue from contracts with customers1                   41 774        39 661          5.3    
Payments to other operators2                              2 940         2 606        (12.8)    
Cost of handsets, equipment and directories3              5 205         4 411        (18.0)    
Sales commission, incentive and logistical costs3         1 457           935        (55.8)   
Other income                                                719           607         18.5    
Operating expenses                                       21 582        21 894          1.4    
Employee expenses4                                       10 049        10 677          5.9    
Other operating expenses                                  3 153         2 991         (5.4)    
Maintenance4                                              3 074         2 696        (14.0)    
Marketing4                                                  806           763         (5.6)    
Impairment of receivables and contract assets               384           635         39.5    
Service fees                                              2 934         3 028          3.1    
Operating leases4                                         1 182         1 104         (7.1)    
EBITDA5                                                  11 309        10 422          8.5    
Depreciation, amortisation, impairment6                       
and write-offs                                            5 814         5 585         (4.1)
Operating profit                                          5 495         4 837         13.6    
Investment income                                           185           186         (0.5)    
Income/(Loss) from associates                                 2          (70)        102.9    
Finance charges and fair value movements7                   947           842        (12.5)    
Net finance charges                                         885           884         (0.1)    
Cost of hedging                                              88           167         47.3    
Foreign exchange and fair value movements                  (26)         (209)         87.6    
Profit before taxation                                    4 735         4 111         15.2    
Taxation                                                  1 391         1 113        (25.0)    
Profit for the year                                       3 344         2 998         11.5    
* Based on pro forma financial information. Refer below for the reconciliation of the reported 
  figures to the adjusted figures.
  
Notes
1 Revenue from contracts with customers grew 5.3 percent, supported by significant growth 
  in mobile revenues. Traditional fixed voice and data continued to decline.

2 Payments to other operators increased 12.8 percent mainly because of higher payments
  to mobile operators in line with the 51.1 percent increase in our mobile voice and
  subscription revenue.

3 Costs of handsets, equipment and directories and sales commission, incentive and logistical 
  costs increased 18.0 percent and 55.8 percent respectively following an increase in mobile 
  acquisition cost driven by the 85.9 percent increase in active mobile subscribers.

4 Operating expenses increased due to:
  a. Employee expenses decreased due to the group headcount decreased 12.5 percent to 15 296 full-time 
     employees.
  
  Partially offset by:
  b. Maintenance expenditure driven by the 28.7 percent increase in mobile sites.
  c. Marketing expenditure increased in Telkom Consumer.
  d. Operating leases cost increased as a result of the 7.1 percent increase in mobile sites and 
     costs relating to the new BCX building.

5 Group EBITDA positively impacted by the 5.3 percent increase in operating revenue while operating expenses 
  decreased 1.4 percent. The lower-than-inflation growth in operating expenses is attributable to our continued 
  focus on cost-efficiency initiatives as part of ongoing business transformation.     
  
6 Depreciation, amortisation, impairments and write-offs increased 4.1 percent, mainly due to the increase 
  in capex, partially offset by the extension of useful lives.       

7 Finance charges and fair value measurements increased largely driven by the lower fair value gain of 
  R65 million (FY2018: R171 million) on the revaluation of the cell captive as a result of the partial 
  disinvestment from the fund in the prior year. The decrease in the cost of hedging is offset by the 
  corresponding loss in foreign exchange movements.

Operating revenue
                                                                     Restated1                 
                                                          March         March                 
                                                           2019          2018                 
                                                             Rm            Rm            %    
Fixed                                                    22 751        24 705         (7.9)    
Voice and subscriptions                                  10 450        12 249        (14.7)    
  Usage                                                   3 898         4 586        (15.0)    
  Subscriptions                                           6 552         7 663        (14.5)    
Interconnection                                             792           868         (8.8)    
  Fixed-line domestic                                       347           380         (8.7)    
  Fixed-line international                                  445           488         (8.8)    
Data                                                      9 925        10 099         (1.7)    
  Data connectivity                                       6 795         7 056         (3.7)    
  Internet access and related services                    2 040         1 907          7.0    
  Managed data network services                           1 050         1 096         (4.2)    
  Multi-media services                                       40            40         (0.3)    
Customer premises equipment sales and rentals             1 542         1 345         14.6    
  Sales                                                     483           252         91.5    
  Rentals                                                 1 059         1 093         (3.1)    
Other revenue                                                43           144        (70.1)    
Mobile                                                   10 754         7 068         52.2    
  Mobile voice and subscriptions                          1 968         1 302         51.1    
  Mobile interconnection                                    270           166         62.8    
  Mobile data                                             5 917         3 683         60.7    
  Mobile handset and equipment sales                      2 407         1 775         35.6    
  Significant financing component revenue                   191           142         34.7    
Information technology                                    6 764         6 370          6.2    
  Information technology service solutions                4 169         3 918          6.4    
  Application solutions                                   1 528         1 592         (4.0)    
  IT hardware and software                                  923           692         33.3    
  Industrial technologies                                   145           168        (13.8)    
Other                                                     1 505         1 518         (0.9)    
  Trudon                                                    651           850        (23.4)    
  Gyro1                                                     609           491         24.2    
  VS Gaming                                                  15            11         33.0    
  BCX - Fastnet                                             230           167         37.9    
Total                                                    41 774        39 661          5.3    
1 During the year we restated the prior year revenue by R1 357 million. Of this amount R656 million 
  related to Smart Office Connexion (SOX). The implementation of IFRS 15 also highlighted a prior year
  error of R641 million relating to the recognition of mobile CPE revenue to dealer stores and R60 million 
  related to the adoption of IFRS 15. These revenue adjustments led to a restatement of the prior year 
  number from R41 018 to R39 661 million.

Notes
1 Gyro revenue disclosure was restated to exclude the R166 million impact of Fastnet revenue in the prior 
  year and included as BCX-Fastnet revenue.    

Revenue variance explanations
Fixed-line voice usage and subscription revenue decreased by 14.7 percent toR10 450 million 
(FY2018: R12 249 million) as the declining trend accelerated, driven by migration to new technologies 
and a 15.3 percent decline in the number of fixed access lines.

Fixed interconnection revenue decreased 8.8 percent to R792 million (FY2018: R868 million), mainly due 
to lower traffic volumes.

Fixed data connectivity services decreased 3.7 percent to R6 795 million (FY2018: R7 056 million). This 
is due to the decline in traditional revenue streams, offset by the increase in fibre and new data products 
including FTTH and metro-ethernet.

Mobile voice and subscription revenue 
increased 51.1 percent to R1 968 million (FY2018: R1 302 million). This is attributed to an 85.9 percent 
increase in the number of active mobile subscribers.

Mobile data revenue increased 60.7 percent to R5 917 million (FY2018: R3 683 million), driven by our strategy 
to focus on data which led to an increase in mobile data traffic.

Information technology increased 6.2 percent to R6 764 million (FY2018: R6 370 million), mainly due to an 
increase in application solutions revenue.

Condensed consolidated provisional statement of financial position*
                                                       Reported      Restated                  
                                                          March         March                  
                                                           2019          2018                  
                                                             Rm            Rm            %    
Assets                                                                                         
Non-current assets                                       37 961        36 359          4.4        
Property, plant and equipment1                           32 035        30 324          5.6        
Intangible assets2                                        4 521         4 492          0.6        
Other investments                                            78           100        (22.0)     
Employee benefits3                                          729           627         16.3       
Other financial assets                                      133            60        121.7      
Finance lease receivables                                   210           262        (19.8)     
Deferred taxation4                                          255           494        (48.4)     
Current assets                                           14 783        13 778          7.3        
Inventories                                               1 267         1 341         (5.5)      
Income tax receivable                                        76            54         40.7     
Current portion of finance lease receivables                108           112         (3.6)    
Contract asset5                                           2 518         1 672         50.6        
Trade and other receivables6                              7 425         6 370         13.9        
Current portion of other financial assets7                  388           163        138.0       
Current portion of other investments                      1 573         1 509          4.2        
Cash and cash equivalents                                 1 428         2 557        (44.2)     
Asset of disposal group classified as held for sale         200           204         (2.0)       
Total assets                                             52 944        50 341          5.2        
Equity and liabilities                                                                          
Equity attributable to owners of the parent              29 573        26 957          9.7        
Share capital                                             5 050         5 050            -          
Share-based compensation reserve                            512           377         35.8        
Non-distributable reserves                                1 621         1 579          2.7         
Retained earnings                                        22 390        19 951         12.2       
Non-controlling interest                                    195           194          0.5        
Total equity                                             29 768        27 151          9.6        
Non-current liabilities                                   6 740        10 268        (34.4)     
Interest-bearing debt8                                    4 840         7 158        (32.4)     
Provisions9                                               1 193         2 427        (50.8)     
Other financial liabilities                                  79             -        100.0       
Deferred revenue                                            466           502         (7.2)      
Deferred taxation                                           162           181        (10.5)     
Current liabilities                                      16 436        12 922         27.2       
Trade and other payables10                                7 406         6 898          7.4         
Shareholders for dividend                                    29            58        (50.0)     
Current portion of interest-bearing debt8                 5 401         2 239        141.2      
Current portion of provisions9                            1 316         1 489        (11.6)     
Current portion of deferred revenue                       1 396         1 597        (12.6)     
Income tax payable                                          572           361         58.4        
Current portion of other financial liabilities7             316           250         26.4        
Credit facilities utilised                                    -            30       (100.0)    
Total liabilities                                        23 176        23 190         (0.1)      
Total equity and liabilities                             52 944        50 341          5.2        
* Does not represent pro forma information reported.

Notes
1  Property, plant and equipment constitutes largely of fixed and mobile network equipment. The increase is 
   driven by additions of R7 034 million, partially offset by depreciation of R4 842 million
   
2  Intangible assets constitute largely of software and goodwill. The increase in intangibles is due to 
   additions of R640 million, mainly attribute to software acquisitions, partially offset by amortisation.
   
3  Employee benefits increased due to a higher discount rate applied to the calculation of the post-employment
   employment liabilities.
   
4  Deferred tax asset reduction of 48.4 percent is attributable to a R67 million additional liability raised 
   in Telkom SA SOC Ltd relating to the actuarial gains recognised on the post-employment benefit plans. 
   This movement was accounted for in other comprehensive income. The remaining movement in the asset is 
   attributable to the IFRS implication noted below, the full recognition of the deferred tax asset 
   in respect of prior year losses and the utilisation of temporary differences. At 31 March 2018, the group 
   did not recognise a deferred tax asset of R341 million in respect of temporary differences and tax losses 
   amounting to R1 220 million that could be carried forward against future taxable income. These differences 
   originated in Telkom company in the prior year. There was no unrecognised deferred tax asset at 31 March 2019.
   
5  Contract assets recognised in accordance with the adoption of IFRS 15. The 50.6 percent increase is supported 
   by the 35.6 percent increase in mobile handset and equipment sales.
   
6  Trade receivables increased 13.9 percent from R6 370 million to R7 425 million, mainly driven by the increase 
   in Mobile revenue. Telkom Mobile debtors increased by R775 million as a result of increased subscribers in 
   the current year.
   
7  Current portion of other financial assets and liabilities increased to R388 million and R316 million respectively 
   due to the movement in Telkom company derivatives.
   
8  Interest bearing debt increased largely due to increased borrowings to fund capital expenditure and optimise 
   the group's capital structure. R2.3 billion of TL20 bond is maturing in February 2020 and was moved from 
   long term to short term. Also, R500 million of the Nedbank term loan is maturing in April 2019.
   
9  The reduction in provisions is largely due to the the decrease in provision for bonuses and a decrease in 
   BCX's provisions for UCS which were paid off in the current year.
   
10 Trade payables increased largely due to an increase in accruals supported by the 4.5 percent increase in 
   direct and operating expenses, excluding the VERP, VSP and section 189 costs of R728 million.


Condensed consolidated provisional statement of cash flows*
                                                       Reported      Restated                  
                                                          March         March                  
                                                           2019          2018                  
                                                             Rm            Rm            %    
Cash flows from operating activities                      5 706          6 039                     
Cash receipts from customers                             40 341         40 091         0.6    
Cash paid to suppliers and employees                    (31 438)       (29 978)        4.9    
Cash generated from operations1                           8 903         10 113       (12.0)    
Interest received                                           441            310        42.3    
Finance charges paid2                                      (847)          (722)      (17.3)    
Taxation paid3                                             (945)        (1 472)       35.8    
Cash generated from operations before                         
dividend paid                                             7 552          8 229        (8.2)
Dividend paid                                            (1 846)        (2 190)      (15.7)    
Cash flows from investing activities                     (7 522)        (6 617)      (13.7)    
Proceeds on disposal of property, plant and            
equipment and intangible assets                              35             82       (57.3)    
Additions to assets for capital expansion4               (7 584)        (7 756)        2.2    
Realisation of investment in other                             
financial assets                                             45             31        45.2
Investments made by FutureMakers                            (18)           (24)       25.0    
Proceeds on realisation of Cell Captive assets                           1 050      (100.0)      
Cash flows from financing activities                        717          1 731       (58.6)    
Loans raised5                                             3 246          7 680       (57.7)    
Loans repaid                                             (2 544)        (4 685)       45.7    
Purchase of shares for the Telkom and 
subsidiaries long term incentive share scheme               (47)           (68)      (30.9)    
Shares repurchased and cancelled                              -           (759)     (100.0)    
Finance lease repaid                                        (42)           (16)     (162.5)    
Repayment of derivatives                                   (222)          (546)       59.3    
Proceeds from settlements of derivatives                    326            125       160.8    
Net decrease in cash and cash equivalents                (1 099)         1 153       195.3    
Net cash and cash equivalents at the beginning                
of the year                                               2 527          1 374        83.9
Net cash and cash equivalents at the end of the year      1 428          2 527       (43.5)    
* Does not represent pro forma information reported.

Notes
1 Cash flow from operating activities decreased mainly due to our 4.9 percent increase in cash 
  paid to suppliers and employees.    
  
2 Increased finance charges paid is largely due to increased borrowings.
  
3 Taxation paid decreased primarily due to lower current taxation in the current period.
  
4 Reduction in payments relating to additions to assets for capital expansion are largely due to reduction in capex rollout.      
  
5 The reduction in loans raised is largely due to disciplined working capital management and lower capital expenditure.


Summary audited consolidated provisional financial statements
 
Board approval 
These summary consolidated provisional financial statements were authorised for issue on 24 May 2019 by the 
Telkom SA SOC Limited board of directors and published on 27 May 2019.

Directors responsibility and audit report
The directors of the company take full responsibility for the preparation of the summary consolidated provisional
financial statements. The summary consolidated provisional financial statements have been audited by our 
independent joint auditors PricewaterhouseCoopers Inc. and SizweNtsalubaGobodo Grant Thornton Inc.

Preparer and supervisor of the summary consolidated provisional financial statements
These summary consolidated provisional financial statements were prepared by the Telkom finance staff under 
the supervision of the group chief financial officer, Tsholofelo Molefe CA (SA).

Independent auditor's report on the summary consolidated provisional financial statements

To the Shareholders of Telkom SA SOC Limited
Opinion
The summary consolidated provisional financial statements of Telkom SA SOC Limited contained in the 
accompanying provisional report, which comprise the summary consolidated provisional statement of financial 
position as at 31 March 2019, the summary consolidated provisional statements of profit or loss and other 
comprehensive income, changes in equity and cash flows for the year then ended, and related notes, are derived 
from the audited consolidated financial statements of Telkom SA SOC Limited for the year ended 31 March 2019. 

In our opinion, the accompanying summary consolidated provisional financial statements are consistent, in all
material respects, with the audited consolidated financial statements, in accordance with the requirements 
of the JSE Limited Listings Requirements for provisional reports, as set out in note 3.1 to the summary 
consolidated provisional financial statements, and the requirements of the Companies Act of South Africa 
as applicable to summary financial statements.
 
Summary Consolidated Financial Statements
The summary consolidated provisional financial statements do not contain all the disclosures required by 
International Financial Reporting Standards and the requirements of the Companies Act of South Africa as 
applicable to annual financial statements. Reading the summary consolidated provisional financial statements 
and the auditor's report thereon, therefore, is not a substitute for reading the audited consolidated 
financial statements and the auditor's report thereon. 

The Audited Consolidated Financial Statements and Our Report Thereon
We expressed an unmodified audit opinion on the audited consolidated financial statements in our report dated 
24 May 2019. That report also includes communication of key audit matters. Key audit matters are those matters 
that, in our professional judgement, were of most significance in our audit of the consolidated financial 
statements of the current period.
 
Director's Responsibility for the Summary Consolidated Financial Statements
The directors are responsible for the preparation of the summary consolidated provisional financial statements 
in accordance with the requirements of the JSE Limited Listings Requirements for provisional reports, set out 
in note 3.1 to the summary consolidated provisional financial statements, and the requirements of the Companies 
Act of South Africa as applicable to summary financial statements. 

Auditor's Responsibility
Our responsibility is to express an opinion on whether the summary consolidated provisional financial statements 
are consistent, in all material respects, with the audited consolidated financial statements based on our 
procedures, which were conducted in accordance with International Standard on Auditing (ISA) 810 (Revised), 
Engagements to Report on Summary Financial Statements.

Other matter
We have not audited future financial performance and expectations expressed by the directors included in the 
commentary in the accompanying financial statements and accordingly do not express an opinion thereon.
 
PricewaterhouseCoopers Inc.          SizweNtsalubaGobodo Grant Thornton Inc.
Director: KJ Dikana                  Director: SY Lockhat
Registered Auditor                   Registered Auditor
Johannesburg                         Johannesburg
24 May 2019                          24 May 2019


Summary consolidated provisional statement of profit or loss and other comprehensive income
for the year ended 31 March 2019
                                                                                              Restated     
                                                                               31 March       31 March*    
                                                                                   2019           2018    
                                                                    Notes            Rm             Rm    
Revenue                                                                 4        41 774         39 661    
Other income                                                                        719            607    
Payments to other operators                                                       2 940          2 606    
Cost of handsets, equipment and directories                                       5 205          4 411    
Sales commission, incentives and logistical costs                                 1 457            935    
Employee expenses                                                       5        10 777         10 677    
Other operating expenses                                                          3 153          2 991    
Maintenance                                                                       3 074          2 696    
Marketing                                                                           806            763    
Impairment of receivables and contract assets                          15           384            635    
Service fees                                                                      2 934          3 028    
Operating leases                                                                  1 182          1 104    
EBITDA                                                                           10 581         10 422    
Depreciation of property, plant and equipment                           5         4 842          4 760    
Amortisation of intangible assets                                       5           702            778    
Write-offs, impairments and losses of property, 
plant and equipment and intangible assets                               5           270             47    
Operating profit                                                                  4 767          4 837    
Investment income                                                                   185            186    
Income/(loss) from associates                                                         2            (70)   
Net finance charges, hedging costs and fair value movements                         947            842    
Net finance charges                                                                 885            884    
Cost of hedging                                                                      88            167    
Foreign exchange and fair value movements                                           (26)          (209)   
Profit before taxation                                                            4 007          4 111    
Taxation                                                                          1 176          1 113    
Profit for the year                                                               2 831          2 998    
Other comprehensive income                                                                                
Items that will be reclassified subsequently to profit or loss                                            
Exchange gains/(losses) on translating foreign operations**                          23            (22)   
Items that will not be reclassified to profit or loss                                                     
Defined benefit plan actuarial gains/(losses)                                     1 352           (652)   
Income tax relating to actuarial gains/(losses)                                     (67)             -    
Other comprehensive income/(loss) for the year, net of taxation                   1 308           (674)   
Total comprehensive income for the year                                           4 139          2 324    
Profit attributable to:                                                                                   
Owners of Telkom                                                                  2 795          2 917    
Non-controlling interests                                                            36             81    
Profit for the year                                                               2 831          2 998    
Total comprehensive income attributable to:                                                               
Owners of Telkom                                                                  4 101          2 243    
Non-controlling interests                                                            38             81    
Total comprehensive income for the year                                           4 139          2 324    
  Basic earnings per share (cents)                                      6         561.9          575.7    
  Diluted earnings per share (cents)                                    6         551.8          563.6    
*  Restated. Refer to note 3.3, 3.4, 3.5 and 3.6.                                                         
** This component of OCI does not attract any tax.                                                        


Summary consolidated provisional statement of financial position
at 31 March 2019
                                                                               Restated       Restated     
                                                              31 March         31 March**      1 April**    
                                                                  2019             2018           2017    
                                                   Notes            Rm               Rm             Rm    
Assets                                                                                                    
Non-current assets                                              37 961           36 359         34 339    
Property, plant and equipment                                   32 035           30 324         27 863    
Intangible assets                                                4 521            4 492          4 719    
Other investments                                                   78              100            314    
Employee benefits                                                  729              627            635    
Other financial assets                                             133               60             60    
Finance lease receivables                                          210              262            310    
Deferred taxation                                      9           255              494            438    
Current assets                                                  14 783           13 778         13 539    
Inventories                                                      1 267            1 341          1 268    
Income tax receivable                                               76               54              9    
Finance lease receivables                                          108              112            237    
Trade and other receivables                           15         7 425            6 370          7 012    
Contract assets                                       15         2 518            1 672          1 031    
Other financial assets                                             388              163            126    
Other investments                                                1 573            1 509          2 388    
Cash and cash equivalents                              8         1 428            2 557          1 468    
Assets classified as held for sale                    11           200              204             12    
Total assets                                                    52 944           50 341         47 890    
Equity and liabilities                                                                                    
Equity attributable to owners of the parent                     29 573           26 957         27 635    
Share capital                                                    5 050            5 050          5 208    
Share-based compensation reserve                                   512              377            452    
Non-distributable reserves                                       1 621            1 579          1 376    
Retained earnings                                               22 390           19 951         20 599    
Non-controlling interests                                          195              194            197    
Total equity                                                    29 768           27 151         27 832    
Non-current liabilities                                          6 740           10 268          6 991    
Interest-bearing debt                                 12         4 840            7 158          4 733    
Employee related provisions                           13         1 186            2 388          1 536    
Non-employee related provisions                       13             7               39             51    
Other financial liabilities                                         79                -              -    
Deferred revenue                                                   466              502            529    
Deferred taxation                                      9           162              181            142    
Current liabilities                                             16 436           12 922         13 067    
Trade and other payables                                         7 406            6 898          7 465    
Shareholders for dividend*                                          29               58             25    
Interest-bearing debt                                 12         5 401            2 239          1 535    
Employee related provisions                           13         1 175            1 325          1 383    
Non-employee related provisions                       13           141              164            124    
Deferred revenue                                                 1 396            1 597          1 571    
Income tax payable                                                 572              361            431    
Other financial liabilities                                        316              250            440    
Credit facilities utilised                             8             -               30             93    
Total liabilities                                               23 176           23 190         20 058    
Total equity and liabilities                                    52 944           50 341         47 890    
*  Includes dividend payable to non-controlling interests of Yellow Pages.
** Restated. Refer to note 3.3, 3.4 and 3.7.


Summary consolidated provisional statement of changes in equity
for the year ended 31 March 2019
                                                                                              Restated     
                                                                               31 March       31 March**    
                                                                                   2019           2018    
                                                                                     Rm             Rm    
Balance at 1 April (as previously reported)                                      27 385         27 906    
Attributable to owners of Telkom                                                 27 026         27 569    
Non-controlling interests                                                           359            337    
Adjustments on initial adoption of IFRS 15 -                                               
Revenue from Contracts with Customers**                                             (90)           (61)   
Adjustments on initial adoption of IFRS 9 -                                                
Financial Instruments                                                               207              -    
SOX deconsolidation**                                                               (48)           (13)   
SOX remeasurement**                                                                 (96)             -    
Restated balance at 1 April                                                      27 358         27 832    
Total comprehensive income for the year                                           4 139          2 324    
Profit for the year                                                               2 831          2 998    
Other comprehensive income/(loss)                                                 1 308           (674)   
Exchange gains/(losses) on translating foreign operations                            23            (22)   
Net defined benefit plan remeasurements                                           1 285           (652)    
Dividend declared*                                                               (1 817)        (2 223)   
Disposal of non-controlling interest                                                  -             (3)   
Increase in share-compensation reserve                                              135             48    
Shares repurchased and cancelled during the year                                      -           (759)   
Increase in treasury shares                                                         (47)           (68)   
Balance at the end of the year                                                   29 768         27 151    
Attributable to owners of Telkom                                                 29 573         26 957    
Non-controlling interests                                                           195            194    
*  Dividend declared includes dividend to the non-controlling interests of Yellow Pages and the BCX group.
** Restated. Refer to note 3.3, 3.4, 3.6 and 3.7.


Summary consolidated provisional statement of cash flows
for the year ended 31 March 2019                       
                                                                                              Restated     
                                                                               31 March       31 March    
                                                                                   2019           2018*    
                                                                    Notes            Rm             Rm    
Cash flows from operating activities                                              5 706          6 039    
Cash receipts from customers                                                     40 341         40 091    
Cash paid to suppliers and employees                                            (31 438)       (29 978)   
Cash generated from operations                                         18         8 903         10 113    
Interest received                                                                   441            310    
Finance charges paid                                                               (847)          (722)   
Taxation paid                                                                      (945)        (1 472)   
Cash generated from operations before dividend paid                               7 552          8 229    
Dividend paid                                                                    (1 846)        (2 190)   
Cash flows utilised for investing activities                                     (7 522)        (6 617)   
Proceeds on disposal of property, plant and            
equipment and intangible assets                                                      35             82    
Additions to assets for capital expansion                                        (7 584)        (7 756)   
Realisation of investment in other financial assets                                  45             31    
Investments made by FutureMakers                                                    (18)           (24)   
Proceeds on realisation of sinking fund                                               -          1 050    
Cash flows from financing activities                                                717          1 731    
Loans raised                                                           19         3 246          7 680    
Loans repaid                                                           19        (2 544)        (4 685)   
Purchase of shares for the Telkom and subsidiaries     
long-term incentive share scheme                                                    (47)           (68)   
Shares repurchased and cancelled                                                      -           (759)   
Finance lease repaid                                                   19           (42)           (16)   
Repayment of derivatives                                                           (222)          (546)   
Proceeds from derivatives                                                           326            125    
Net (decrease)/increase in cash and cash equivalents                             (1 099)         1 153    
Net cash and cash equivalents at 1 April                                          2 527          1 374    
Net cash and cash equivalents at the end of the year                    8         1 428          2 527    
*  Restated. Refer to note 3.8.


Notes to the summary consolidated provisional financial statements
for the year ended 31 March 2019
1.    Independent audit
The summary consolidated provisional financial statements have been derived from the audited group financial
statements. The directors of the company take full responsibility for the preparation of the summary consolidated 
provisional financial statements and that the financial information has been correctly derived and are consistent 
in all material respects with the underlying audited group financial statements. The summary consolidated 
provisional financial statements for the year ended 31 March 2019 have been audited by our joint auditors 
PricewaterhouseCoopers Inc. and SizweNtsalubaGobodo Grant Thornton Inc., who have expressed an unmodified opinion 
thereon. The auditors also expressed an unmodified opinion on the group financial statements from which the 
summary consolidated provisional financial statements were derived. A copy of the auditors' report on the group 
financial statements is available for inspection at the company's registered office, together with the financial 
statements identified in the auditors' report.

2.    Corporate information
Telkom SA SOC Limited (Telkom), the ultimate parent of the group, is a company incorporated and domiciled in 
the Republic of South Africa (South Africa) whose shares are publicly traded on the Johannesburg Stock Exchange 
(JSE). The main objective of Telkom, its subsidiaries, joint ventures and associates (the group) is to supply 
telecommunication, multimedia, technology, information, mobile communication services and other related 
information technology services to the group's customers in Africa. Turnkey property and tower management 
solutions are also provided through the Gyro group, which is a wholly owned subsidiary of the group.

3.    Basis of preparation, significant accounting judgements, estimates and assumptions and significant 
      accounting policies
3.1   Basis of preparation
The summary consolidated provisional financial statements have been prepared in accordance with International
Financial Reporting Standard, IAS 34 Interim Financial Reporting and in compliance with the Listings Requirements of 
the JSE Limited, the South African Companies Act, 2008, the SAICA Financial Reporting Guide as issued by the Accounting 
Practices Committee and the Financial Pronouncements as issued by the Financial Reporting Standards Council.

The summary consolidated provisional financial statements are disclosed in South African Rand, which is also the
parent company's presentation and functional currency. Unless stated otherwise, all financial information presented 
in Rand has been rounded off to the nearest million. 

The summary consolidated provisional financial statements are prepared on the historical cost basis, with the
exception of certain financial instruments subsequently measured at fair value. Details of the group's significant 
accounting policies are consistent with those applied in the previous financial year except for those listed below. 

3.2   Significant accounting judgements, estimates and assumptions
In preparing these summary consolidated provisional financial statements, the significant judgements made by
management in applying the group's accounting policies and the key sources of estimation uncertainty were consistent 
with those applied to the consolidated annual financial statements for the year ended 31 March 2018, with the exception 
of the judgements and estimates related to the adoption of IFRS 15 Revenue from Contracts with Customers (refer to 
note 3.3.1), IFRS 9 Financial Instruments (refer to note 3.3.2) and the useful lives of property, plant and equipment 
(refer to note 5).

3.3   Significant accounting policies
The summary consolidated provisional financial statements have been prepared in accordance with the accounting
policies adopted in the previous financial year, except for the adoption of the new and amended standards as well as 
a change made to the presentation basis for cost of sales as set out below. Disclosure has only been provided for new 
standards and interpretations which became effective for the current period where the adoption had a material impact 
on the group.

The group adopted IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments in the current year.

The group has restated the prior period financial statements as a result of the adoption of the changes in the new
revenue standard. 

3.3.1 Adoption of IFRS 15 Revenue from Contracts with Customers
IFRS 15 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts
with customers. The standard replaces revenue recognition guidance including IAS 18 Revenue, IAS 11 Construction
Contracts and the related Interpretations.

The core principle of IFRS 15 is that an entity should recognise revenue to depict the transfer of promised goods or
services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange
for those goods or services. The standard requires the entities in the Telkom group to apportion revenue earned from
contracts to the identified performance obligations in the contracts on a relative stand-alone selling price basis, 
based on a five-step model.

The standard also requires the capitalisation of costs incremental to obtaining the contract and recognition of these
costs as an expense over the contract term. Telkom has applied the practical expedient to only defer costs related to
contracts with terms over 12 months.

The group is in the business of supplying fixed voice and data services to post and pre-paid customers and the sale of
subscription based value-added voice services and calling plans. The group also sells fixed line customer premises
equipment and services both for voice and data needs. Mobile communication services include voice and data services and
customer premises equipment. Sundry revenue includes directory services and wireless data services. The equipment and
services are sold both on their own in separate identified contracts with customers and together as a bundled package 
of goods and/or services. Separate performance obligations are identified to the extent that the goods and services are
distinct and the customer can benefit from it, either on its own or together with other goods and services.

In accordance with the transition provisions in IFRS 15, the group has adopted the new standard using the fully
retrospective approach and has restated comparative numbers for the 31 March 2018 financial period respectively. 

The group applied the following practical expedients when applying IFRS 15 retrospectively:
- The group did not restate comparative numbers for contracts that were completed at 1 April 2017; and
- The group did not restate comparative numbers for contracts that began and ended in the same annual reporting
  period.

The nature and changes in the financial statements were as follows:

                        Nature and
Type of                 characteristics          Nature of change required                                           
item                    of the item              on implementation of                                                
affected                affected                 the new standard               Impact                                               
                                                                                                                                     
3.3.1.1   Contract      The group incurs         Where the costs incurred       The adoption of the standard has led to a            
          costs         commission costs         relate to the acquisition of   higher level of costs qualifying for deferral        
                        in relation to           a contract, the standard       over the contract term. This has led to a            
                        contracts entered        requires the costs to be       reduction in costs recognised on the date that       
                        into with customers.     capitalised and recognised     a contract is signed with a customer at the          
                        Commission costs are     as an expense over the         date of initial application as the costs are now     
                        paid based on new        contract terms engaged         initially accounted for as a contract asset and      
                        contracts entered        with the customer.             recognised as an expense over the contract           
                        into.                                                   term as opposed to being expensed on                 
                                                                                contract inception.                                  

3.3.1.2   Installation  The group earns          Where the payment of an        The group had previously recognised                  
          fee revenue   installation fees for    installation fee provides      installation fees on fixed-term contracts            
                        various installation     the customer with a            over an estimated customer relationship              
                        services attached to     material substantive           period. Where installation fees were received        
                        the provision of fixed   right, the installation fee    in relation to month-to-month service                
                        and mobile services.     should be recognised over      contracts, the installation fees were previously     
                        Installation fees are    an estimated customer          recognised on the date of completion of              
                        recognised for both      relationship period as         the installation service. The adoption of            
                        fixed-term and           opposed to recognition on      the standard has resulted in the deferral of         
                        month-to-month           the date that delivery is      installation fees over the estimated customer        
                        contracts.               completed.                     relationship period. This led to a reduction in      
                                                                                revenue in the comparative statement of profit       
                                                                                or loss and will lead to an increase in revenue      
                                                                                in future periods as the revenue is recognised       
                                                                                over the customer relationship period.               

3.3.1.3   Fixed-line    The group bundles        Revenue relating to each       Fixed-line:                                          
          and Mobile    voice, data and          item bundled together          The group previously did not recognise               
          customer      customer premises        in a contract will be          revenue allocated to equipment where the             
          premises      equipment together       recognised based on the        equipment was provided to the customer as            
          equipment     in its post-paid         allocated transaction price.   a "free" element of a bundle. The adoption of        
                        contracts. Revenue       The transaction price will     IFRS 15 has resulted in a portion of the service     
                        related to the           be allocated based on          revenue attributable to the "free" elements in       
                        customer premises        the relative stand-alone       fixed-line contracts being recognised upfront,       
                        equipment is             selling price of each item     when control is transferred, as opposed to           
                        recognised once          in the bundle. The group       being recognised over the contract term as           
                        control of the           has elected to apply the       part of the subscription revenue. This has           
                        equipment has been       practical expedient to not     resulted in an increase in customer premises         
                        transferred to the       recognise a significant        equipment revenue and a reduction in service         
                        customer. Customers      financing component for        revenue.                                             
                        settle the obligation    any contract which is less                                                          
                        relating to the          than 12 months. Where          Mobile:                                              
                        equipment over the       the contract term exceeds      The group has historically been allocating           
                        contract term. The       12 months, a portion           revenue primarily to the main data, voice            
                        term is usually in       of the transaction price       and equipment elements in a contract.                
                        excess of 12 months.     allocated to customer          Revenue was not previously allocated to a            
                                                 premises equipment will be     financing component. The adoption of IFRS            
                                                 recognised as significant      15 has resulted in a reduction in customer           
                                                 financing component            premises equipment revenue as a larger               
                                                 revenue over the contract      portion of the total transaction price is now        
                                                 term.                          allocated to service related revenue as well         
                                                                                as the recognition of a significant financing        
                                                                                component.                                           

The following accounting policies are applicable to revenue recognition and the related disclosures following the
adoption of the new standard:

Contract costs
Contract assets are capitalised and amortised over the contract term. The amortised costs are included as part of cost
of contracts with customers or other operating expenses as determined by the costs of contracts with customers policy.

Significant financing component
The group assesses post-paid contracts at inception to determine whether a significant financing component exists. 
If the financing component is less than 5% of the total transaction price allocated to the customer premises equipment, 
it is deemed not to be significant and the finance component will not be recognised separately. The financing element 
is assessed on a contract-by-contract basis.

3.3.2 Adoption of IFRS 9 Financial Instruments 
The new standard includes the final classification and measurement model for financial assets and liabilities as well
as the new expected credit loss (ECL) model for the impairment of financial assets that replaces the incurred loss model
prescribed in IAS 39. The IAS 39 classification model for financial liabilities has been retained, however changes in
own credit risk will be presented in other comprehensive income for liabilities designated at fair value through profit
or loss. IFRS 9 also includes new requirements for general hedge accounting. 

Initial classification and measurement
IFRS 9 introduces new measurement categories for financial assets. The impact of the measurement categories of IFRS 9
on the group's financial instruments is illustrated in the table below. 

                                   Measurement category                        Carrying amount                                    
                                Original                  New              Original        New                        
                                (IAS 39)                (IFRS 9)           (IAS 39)      (IFRS 9)      Difference     
Assets                                                                                                                     
(As at 1 April 2017)                                                                                                       
                            Fair value through       Fair value through                                                    
Other investments           profit or loss           profit or loss          2 399          2 399               -    
Trade and other             Loans and                                                                                
receivables                 receivables              Amortised cost          7 557          7 557               -    
Other financial assets                                                                                                    
  Forward exchange          Fair value through       Fair value through                                                   
  contracts                 profit or loss           profit or loss             54             54               -    
  Firm                      Fair value through       Fair value through                                                   
  commitments               profit or loss           profit or loss             24             24               -    
  Asset finance             Loans and                                                                                     
  receivables               receivables              Amortised cost             73             73               -    
                            Loans and                                                                                
 Loans                      receivables              Amortised cost             35             35               -    
Finance lease               Loans and                                                                                
receivables                 receivables              Amortised cost            547            547               -    
Cash and cash               Loans and                                                                                
equivalents                 receivables              Amortised cost          1 612          1 612               -    
Liabilities                                                                                                               
(As at 1 April 2017)                                                                                                     
Interest-bearing                                                                                                         
 debt                        Amortised cost          Amortised cost         (6 285)        (6 285)              -    
Trade and other                                                                                                      
payables                     Amortised cost          Amortised cost         (7 516)        (7 516)              -    
Shareholders                                                                                                         
for dividend                 Amortised cost          Amortised cost            (25)           (25)              -    
Other financial                                                                                                           
liabilities                                                                                                               
  Forward exchange          Fair value through       Fair value through                                                   
  contracts                 profit or loss           profit or loss           (189)          (189)              -    
  Firm                      Fair value through       Fair value through                                                   
  commitments               profit or loss           profit or loss           (229)          (229)              -    
  Interest rate             Fair value through       Fair value through                                                   
  swaps                     profit or loss           profit or loss            (22)           (22)              -    


Impairment
IFRS 9 requires the group to record expected credit losses on all of its debt securities, loans, trade receivables,
other receivables, cash and cash equivalents and finance lease receivables, either on a 12-month or lifetime basis.

The group has elected the simplified approach to recognise lifetime expected losses for its trade and other
receivables and contract assets as permitted by IFRS 9. The group has assessed and concluded that due to the short-term 
nature of its trade and other receivable balances, the trade receivable balances are not significantly exposed to the 
impact of changes in the macro-economic environment. The provision model will therefore not include economic environmental 
changes as assumptions applied in deriving the expected loss on its trade and other receivables and contract assets. 
The group has historically been raising provisions for bad debt based on incurred losses.

Impairment losses calculated using the simplified approach are calculated using a provision matrix. The provision
matrix is a probability-weighted model which applies an expected loss percentage, based on the net write-off history
experienced on receivables, to each ageing category of receivables at the end of each month in order to calculate the 
total provision to be raised on the receivable balances.

Receivables have been grouped together based on similar credit characteristics and a separate expected loss provision
matrix has been calculated for each of the categories based on the net loss history associated to the specific category
of receivable.

IFRS 9 has revised the criteria for the write-off of a financial instrument. The group has historically been writing
off trade receivables at the point where a trade receivable balance is handed over for debt collection. Trade receivables
are handed over for collection when the group has been unable to collect outstanding amounts through its internal
collection processes. The subsequent collection was then accounted for as a reduction in the provision for bad debt expense.
Following the adoption of IFRS 9, the group has implemented a process whereby trade receivable balances are only written
off at the point where there is no longer any probable recovery on a trade receivable balance. This has resulted in an
increase in the trade receivable balance of R746 million and R559 million in the allowance account for credit losses.
The net adjustment has been accounted for as an adjustment to the opening balance of retained earnings on transition 
to IFRS 9.

Telkom recognises lifetime expected credit losses on finance lease receivables in terms of the simplified approach to
recognise lifetime expected credit losses. Whenever a finance lease receivable is billed, the amount is moved from
finance lease receivables to trade receivables and forms part of the trade receivables balance. To determine an expected
credit loss for the outstanding lease receivables, the total outstanding amounts are proportioned into the various ageing
buckets based on the proportions experienced in the trade receivables. The same loss rates that are used for the fixed
line trade receivables segment are then applied to the outstanding lease receivables balance to derive the expected loss 
on finance lease receivables over the lifetime of the instrument. The underlying assumption attached to this is that the
exposure to the finance lease balance will realise as the balance is billed to the customer over the lifetime of the
instrument and will thus follow the same pattern of expected loss as the trade receivable balance.

Twelve month expected credit losses are calculated for cash and cash equivalents using the general approach. Due to
the fact that Telkom's cash and cash equivalents are noted as being current assets, the twelve month and lifetime expected
credit losses are expected to be equivalent. In addition, given that these amounts are invested with South Africa's
largest four banks, management's expectation is that the impact on the total provision is negligible. 

Impairments of all other financial assets that are not measured using the simplified approach will be calculated as
the difference between the carrying value of the asset and the present value of the expected cash flows, discounted at 
the original effective interest rate of the instrument. 

Hedge accounting
Subsequent to making the decision which informed the transition disclosures in the 31 March 2018 financial statements,
the group has elected to continue applying the hedge accounting requirements of IAS 39.

Transition
The group is applying IFRS 9 retrospectively, applying the practical expedients relating to the accounting for
expected credit losses, in terms of which the opening balance of retained earnings has been adjusted in the current 
financial period.

The impairment loss on trade receivables was previously recognised where it was assessed that the receivable was
impaired. The impairment was based on an assessment of the extent to which customers had defaulted on payments due and 
an assessment of their ability to make payments based on their creditworthiness and historical write-offs experience. 
The adoption of IFRS 9 has resulted in a reduction of the allowance for credit losses of R61 million due to a lower 
estimated loss based on the revised model.

3.4   Prior period error
3.4.1 Prior period error - mobile CPE revenue recognition
As part of the IFRS 15 implementation process, the group reassessed the revenue recognition principles and the
judgement applied to mobile CPE sales to independently owned dealer stores. It was identified that upon transfer of 
a device to a dealer, revenue was recognised relating to the sales of devices. At this point, the group would also 
recognise the cost of sale relating to the inventory transferred to the dealer. 

Subsequent to this transaction, in the event where a device would be bundled with a post-paid mobile contract, Telkom
would recognise revenue again as a second transaction relating to the device sold with the post-paid contract.

At this point, the group would reimburse the dealer for the device and recognise the cost of reimbursement as a cost
of sale transaction. The accounting treatment adopted resulted in the overstatement of operating revenue and
corresponding cost of sales. 

There was however no impact on the net operating revenue, EBITDA, profit before tax or basic earnings per share and
headline earnings per share. The previous accounting treatment had no impact on the statement of financial position 
as it only resulted in an overstatement of the revenue and cost of sales line items respectively.

Taking into account the agent versus principal rules defined in IFRS 15, the accounting treatment for the current
period has been corrected to only reflect a device sale once the device has been sold outright to an end customer 
or been bundled in a post-paid contract. 

3.4.2 Prior period error - Smart Office Connexion group consolidation
Telkom group, through its wholly owned subsidiary BCX, is invested in the Smart Office Connexion (SOX) group. 
The SOX group consists of 9 individual entities. These entities were consolidated during the prior financial year.

During the current financial year, it was identified that owing to substantive protective rights granted to the
minority shareholder, BCX did not have control of the subsidiaries as defined by IFRS 10 Consolidated Financial 
Statements.

The matter has been assessed as a material prior period error and has been corrected by restating the comparative
financial statements as required by IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.

The effect of the restatement is the deconsolidation of the SOX group on a line-by-line basis in the financial
statements and the recognition of the investments in the underlying entities of the SOX group on an equity accounted 
basis in terms of IAS 28 Investments in Associates and Joint Ventures.

During the comparative financial period, the investment in the SOX group was classified as held for sale. 
The consolidated net asset value of the SOX group was assessed in terms of IFRS 5 Non-current Assets Held for Sale and 
Discontinued Operations, it was concluded that there was no remeasurement required at a Telkom group level. Following 
the change to account for the investments as equity accounted investments, a remeasurement was identified. The income 
from joint ventures and associates line item in the financial statements has been restated to reflect the remeasurement 
as an adjustment in the 2018 financial year. This resulted in an additional R96 million impairment accounted for in 
the 2018 financial year.

Refer to note 3.6, 3.7 and 3.8 for each materially affected line item as part of the adoption of the new standards and
the correction of the prior period error. 

3.5   Change in presentation of the statement of profit or loss and other comprehensive income from a hybrid to a
      by-nature of expense basis due to classification error
In the current financial reporting period, the JSE queried the hybrid presentation basis applied in Telkom's statement
of profit or loss and other comprehensive income. The JSE is of the opinion that this basis is contrary to the
requirements of IFRS.

The JSE however concurred with management's view that this presentation basis did not result in a material
misstatement of the previously reported financial results.

As part of the resolution of the matter, Telkom proposed to address the error by changing its presentation basis from
a hybrid to a by-nature presentation basis in the spirit of supporting 'the effective functioning of the capital markets
and the JSE's regulatory objectives'. The proposal was accepted by the JSE and subsequently implemented across the
Telkom group.

The change in presentation basis has resulted in the removal of the cost of sales line item from the statement of
profit or loss and other comprehensive income. The cost of sales line has been replaced by the following two items which
previously made up total cost of sales: 
- Costs of handsets, equipment and directories 
- Sales commission, incentives and logistical costs 

These line items are now being presented separately. 

In addition, as requested by the JSE, we have included an accounting policy note which clarifies the nature of the
costs on the by-nature presentation basis as follows: 

Costs of handsets, equipment, directories, sales commission, incentives and logistical costs 
The costs of handsets, equipment and directories represents the acquisition cost of the items sold net of any supplier
rebates and discounts. This line item does not include any allocated overhead costs. 

Sales commission and incentives are costs paid to Telkom's independent sales channels. Logistical costs represent
costs incurred with third parties outside the group for the delivery of handsets to customers and stores. This line 
item does not include the allocation of any other expense classified by nature in the financial statements. 

Following the change referred to above, the subtotal "net operating revenue" was removed from the statement of profit
or loss and other comprehensive income. 

As the group continues to implement its current business plan, a greater focus has been placed on the key reporting
metrics on which the group provides financial guidance: 
- Gross Operating Revenue 
- EBITDA Margin 
- CAPEX to Revenue 
- Net Debt to EBITDA 

The chief operating decision maker no longer measures its business units on a "net operating revenue" basis 
and it has therefore been considered appropriate to remove this line item from the financial statements to 
accurately reflect the manner in which management reviews the financial performance of the group. 

The changes made above have had no impact on any of the reported key metrics as noted 
above and do not impact any of the financial guidance issued by the group. The group has 
re-presented the 31 March 2018 statement of profit or loss and other comprehensive income. 

3.6   Adjustment to the summary consolidated statement of profit or loss and other comprehensive income 

                                                                       Year ended 31 March 2018
                                                                                     Change in                                     
                                                          SOX          SOX        presentation           Mobile CPE                
                                              As       Decon-   Remeasure-           basis and             restate-               
                                      previously   solidation         ment   reclassifications    IFRS         ment               
                                        reported         ****         ****                 ***      15         ****   Restated     
                                              Rm           Rm           Rm                  Rm      Rm           Rm         Rm    
Operating revenue                         41 018         (656)           -                   -     (60)        (641)    39 661    
  Voice**                                 13 679            -            -                   -    (128)           -     13 551    
  Interconnection                          1 034            -            -                   -       -            -      1 034    
  Data*                                   13 629            -            -                   -     153            -     13 782    
  Customer premises equipment**            3 988            -            -                   -    (227)        (641)     3 120    
  Significant financing component**            -            -            -                   -     142            -        142    
  Sundry revenue                           1 662            -            -                   -       -            -      1 662    
  Information technology                   7 026         (656)           -                   -       -            -      6 370    
Other income                                 607            -            -                   -       -            -        607    
Payments to other operators                2 606            -            -                   -       -            -      2 606    
Cost of sales                              6 256         (238)           -              (6 018)      -            -          -    
Cost of handsets, equipment          
and directories                                -            -            -               5 052       -         (641)     4 411    
Sales commission, incentives and      
logistical costs                               -            -            -                 966     (31)           -        935    
Employee expenses                         10 917         (240)           -                   -       -            -     10 677    
Selling, general and administrative  
expenses                                   7 132          (47)           -              (7 085)      -            -          -    
Other operating expenses                       -            -            -               2 991       -            -      2 991    
Maintenance                                    -            -            -               2 696       -            -      2 696    
Marketing                                      -            -            -                 763       -            -        763    
Impairment of receivables and        
contract assets                                -            -            -                 635       -            -        635    
Service fees                               3 054          (26)           -                   -       -            -      3 028    
Operating leases                           1 116          (12)           -                   -       -            -      1 104    
EBITDA                                    10 544          (93)           -                   -     (29)           -     10 422    
Depreciation of property, plant      
and equipment                              4 780          (20)           -                   -       -            -      4 760    
Amortisation of intangible assets            778            -            -                   -       -            -        778    
Write-offs, impairments/(reversals)   
and losses of property, plant and     
equipment and intangible assets               47            -            -                   -       -            -         47    
Operating profit                           4 939          (73)           -                   -     (29)           -      4 837    
Investment income                            203          (17)           -                   -       -            -        186    
Income/(loss) from associates                  -           26          (96)                  -       -            -        (70)   
Net finance charges, hedging           
costs and                                                                              
fair value movements                         851           (9)           -                   -       -            -        842    
Net finance charges                          893           (9)           -                   -       -            -        884    
Cost of hedging                                -            -            -                 167       -            -        167    
Foreign exchange and fair              
value movements                              (42)           -            -                (167)      -            -       (209)   
Profit before taxation                     4 291          (55)         (96)                  -     (29)           -      4 111    
Taxation                                   1 133          (20)           -                   -       -            -      1 113    
Profit for the year                        3 158          (35)         (96)                  -     (29)           -      2 998    
Other comprehensive income                                                                                                        
Items that will be reclassified                                                                                     
subsequently to profit or loss                                                                                      
Exchange gains on translating                                                                                       
foreign operations                           (22)           -            -                   -       -            -        (22)   
Items that will not be reclassified                                                                                 
to profit or loss                                                                    
Defined benefit plan actuarial loss         (652)           -            -                   -       -            -       (652)   
Income tax relating to actuarial loss          -            -            -                   -       -            -          -    
Other comprehensive income for the                                                                                  
year, net of taxation                       (674)           -            -                   -       -            -       (674)   
Total comprehensive                    
income for the year                        2 484          (35)         (96)                  -     (29)           -      2 324    
Profit attributable to:                                                                                                           
Owners of Telkom                           3 052          (10)         (96)                  -     (29)           -      2 917    
Non-controlling interests                    106          (25)           -                   -       -            -         81    
Profit for the year                        3 158          (35)         (96)                  -     (29)           -      2 998    
Total comprehensive income             
attributable to:                                                                                       
Owners of Telkom                           2 378          (10)         (96)                  -     (29)           -      2 243    
Non-controlling interests                    106          (25)           -                   -       -            -         81    
Total comprehensive income             
for the year                               2 484          (35)         (96)                  -     (29)           -      2 324    
  Basic earnings per share (cents)         602.3         (2.0)       (18.9)                  -    (5.7)           -      575.7    
  Diluted earnings per share (cents)       589.7         (1.9)       (18.6)                  -    (5.6)           -      563.6    
*    Includes a R45 million restatement relating to installation fees. Refer to note 3.3.1.2 and 3.3.1.3.
**   Refer to note 3.3.1.3.
***  Refer to note 3.5.
**** Refer to note 3.4.1 and 3.4.2.

3.7   Adjustments to the summary consolidated statement of financial position
                                               As at 31 March 2018                               As at 1 April 2017
                                         As                                              As                                        
                                 previously           SOX                        previously           SOX                          
                                   reported   Restatement   IFRS 15   Restated     reported   Restatement   IFRS 15   Restated    
                                         Rm            Rm        Rm         Rm           Rm            Rm        Rm         Rm    
Assets                                                                                                                            
Non-current assets                   36 417           (58)        -     36 359       34 125           214         -     34 339    
Property, plant and equipment        30 377           (53)        -     30 324       27 918           (55)        -     27 863    
Intangible assets                     4 492             -         -      4 492        4 720            (1)        -      4 719    
Other investments                       100             -         -        100           40           274         -        314    
Employee benefits                       627             -         -        627          635             -         -        635    
Other financial assets                   60             -         -         60           60             -         -         60    
Finance lease receivables               262             -         -        262          310             -         -        310    
Deferred taxation                       499            (5)        -        494          442            (4)        -        438    
Current assets                       14 127          (403)       54     13 778       13 912          (384)       11     13 539    
Inventories                           1 435           (94)        -      1 341        1 384          (116)        -      1 268    
Income tax receivable                    54             -         -         54            9             -         -          9    
Finance lease receivables               112             -         -        112          237             -         -        237    
Trade and other receivables           8 126          (138)   (1 618)     6 370        8 156          (124)   (1 020)     7 012    
Contract assets                           -             -     1 672      1 672            -             -     1 031      1 031    
Other financial assets                  163             -         -        163          126             -         -        126    
Other investments                     1 509             -         -      1 509        2 388             -         -      2 388    
Cash and cash equivalents             2 728          (171)        -      2 557        1 612          (144)        -      1 468    
Assets classified as             
held for sale                             -           204         -        204           12             -         -         12    
Total assets                         50 544          (257)       54     50 341       48 049          (170)       11     47 890    
Equity and liabilities           
Equity attributable to           
owners of the parent                 27 026            21       (90)    26 957       27 569           127       (61)    27 635    
Share capital                         5 050             -         -      5 050        5 208             -         -      5 208    
Share-based compensation         
reserve                                 377             -         -        377          452             -         -        452    
Non-distributable reserves            1 579             -         -      1 579        1 376             -         -      1 376    
Retained earnings                    20 020            21       (90)    19 951       20 533           127       (61)    20 599    
  Deferral of incremental           
  contract costs                          -             -       149          -            -             -       118          -    
  Deferral of installation          
  fee revenue                             -             -       (46)         -            -             -        (1)         -    
  Earlier recognition               
  of fixed-line                     
  customer premises                 
  equipment revenue                 
  and recognition of significant                                                                                   
  financing component                     -             -        32          -            -             -        27          -    
  Lower recognition of mobile                                                                                        
  customer premises equipment                                                                                        
  revenue and recognition of                                                                                         
  significant financing component         -             -      (225)         -            -             -      (205)         -    
Non-controlling interests               359          (165)        -        194          337          (140)        -        197    
Total equity                         27 385          (144)      (90)    27 151       27 906           (13)      (61)    27 832    
                                    
Non-current liabilities              10 240           (10)       38     10 268        7 004           (13)        -      6 991    
Interest-bearing debt                 7 165            (7)        -      7 158        4 744           (11)        -      4 733    
Employee related provisions           2 388             -         -      2 388        1 536             -         -      1 536    
Non-employee related provisions          44            (5)        -         39           56            (5)        -         51    
Deferred revenue                        464             -        38        502          529             -         -        529    
Deferred taxation                       179             2         -        181          139             3         -        142    
Current liabilities                  12 919          (103)      106     12 922       13 139          (144)       72     13 067    
Trade and other payables              6 878           (78)       98      6 898        7 516          (122)       71      7 465    
Shareholders for dividend                58             -         -         58           25             -         -         25    
Interest-bearing debt                 2 247            (8)        -      2 239        1 541            (6)        -      1 535    
Employee related provisions           1 340           (15)        -      1 325        1 397           (14)        -      1 383    
Non-employee related provisions         164             -         -        164          124             -         -        124    
Deferred revenue                      1 589             -         8      1 597        1 570             -         1      1 571    
Income tax payable                      363            (2)        -        361          433            (2)        -        431    
Other financial liabilities             250             -         -        250          440             -         -        440    
Credit facilities utilised               30             -         -         30           93             -         -         93    
                                                                                                                                  
Total liabilities                    23 159          (113)      144     23 190       20 143          (157)       72     20 058    
Total equity and liabilities         50 544          (257)       54     50 341       48 049          (170)       11     47 890    
                                    
3.8   Adjustments to the summary consolidated statement of cashflows
                                                                                              Year ended 31 March 2018
                                                                                            As               SOX                   
                                                                           previously reported       Restatement*     Restated    
                                                                                            Rm                Rm            Rm    
Cash flows from operating activities                                                     6 084               (45)        6 039    
Cash receipts from customers                                                            41 049              (958)       40 091    
Cash paid to suppliers and employees                                                   (30 878)              900       (29 978)   
Cash generated from operations                                                          10 171               (58)       10 113    
Interest received                                                                          327               (17)          310    
Finance charges paid                                                                      (731)                9          (722)   
Taxation paid                                                                           (1 493)               21        (1 472)   
Cash generated from operations before dividend paid                                      8 274               (45)        8 229    
Dividend paid                                                                           (2 190)                -        (2 190)   
Cash flows utilised for investing activities                                            (6 634)               17        (6 617)   
Proceeds on disposal of property, plant and                         
equipment and intangible assets                                                             82                 -            82    
Additions to assets for capital expansion                                               (7 773)               17        (7 756)   
Realisation of investment in other financial assets                                         31                 -            31    
Investments made by FutureMakers                                                           (24)                -           (24)   
Proceeds on realisation of sinking fund                                                  1 050                 -         1 050
Cash flows from financing activities                                                     1 729                 2         1 731    
Loans raised                                                                             7 680                 -         7 680    
Loans repaid                                                                            (4 685)                -        (4 685)   
Purchase of shares for the Telkom and                                                      (68)                -           (68)   
subsidiaries long term incentive share scheme                                                                                     
Shares repurchased and cancelled                                                          (759)                -          (759)   
Finance lease repaid                                                                       (18)                2           (16)   
Repayment of derivatives                                                                  (546)                -          (546)   
Proceeds from derivatives                                                                  125                 -           125    
Net increase/(decrease) in cash and                                                      1 179               (26)        1 153    
cash equivalents                                                                                                                  
Net cash and cash equivalents at 1 April                                                 1 519              (145)        1 374    
Net cash and cash equivalents at the end of the year                                     2 698              (171)        2 527    
* Refer to note 3.4.2.                                                

3.9   Standards and interpretations in issue not yet adopted and not yet effective
Information on standards issued by the IASB, but not effective for the current financial year, has been provided below
where it is expected that the new standards will have a material impact on the group.

Management anticipates that all relevant pronouncements will be adopted in the group's accounting policies for the
first period beginning after the effective date of the pronouncement. New standards, interpretations and amendments 
neither adopted nor listed below are not expected to have a material impact on the group's financial statements.

The following new standard in issue has not yet been adopted and is not yet effective. 
The standard is effective for the 31 March 2020 financial period. 

3.9.1 IFRS 16 Leases
IFRS 16 Leases, issued by the IASB in January 2016, is effective for reporting periods beginning on, or after, 
1 January 2019 and will be adopted by the group on 1 April 2019.

IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases. The standard 
introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases 
with a term of more than 12 months, unless the underlying asset is of low value. A lessee is required to recognise 
a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing 
its obligation to make lease payments.

Leases where the group acts as lessor
IFRS 16 substantially carries forward the lessor accounting requirements in IAS 17 Leases. Accordingly, a lessor
continues to classify its leases as operating leases or finance leases, and to account for those two types of leases
differently. The group is not materially affected by the changes made to operating and finance leases and the treatment 
of residual guaranteed values. However, additional disclosures will be required in the 2020 financial year.  

Leases in which the group is a lessee
The adoption of the standard will result in a significant increase in the asset and liability position from the
recognition of right-of-use assets and lease liabilities representing the present value of future minimum lease payments
discounted at a rate appropriate after taking the lease term into account, attributable to the following major lease
categories:
- Mast and Tower infrastructure lease agreements
- Property leases (including warehousing)
- Vehicle fleet leases

The right-of-use assets will be subsequently measured using the cost model as set out in 
IAS 16 Property, Plant and Equipment. The right-of-use liabilities will subsequently be measured at amortised cost. 

As at the reporting date, the group has non-cancellable operating lease commitments of R1 906 million. 

The adoption of the new standard will not affect the profit after tax over the duration of a contract as the total
lease payments which would have been expensed over the lease term are unaffected. However, due to the impact of higher
finance charges in the early years of the lease, the impact on earnings will initially be dilutive, before being accretive
in later periods. 

The new standard moves the majority of lease payments below EBITDA , as well as a depreciation charge on the
right-of-use asset and interest expense on the lease liability as opposed to operating lease expenses. This will result 
in an increase in EBITDA over the lease term. Application of the standard will also impact key ratios linked to EBITDA 
e.g. Net debt to EBITDA.

Under IAS 17 Leases, the operating lease payments were included in cash flows from operating activities. Following the
adoption of IFRS 16 Leases, the lease payments will be included in cash flows from financing activities. This will result
in an increase in the inflows from operating activities and an increase in the outflows from financing activities owing
to a significant reclassification between the line items on the statement of cash flows.

The following key judgements will be applied in the adoption of the new standard:
Lease discount         Except where a discount rate implicit in the lease has been stipulated           
rate                   in the lease agreement, the discount rate for a lease will be determined         
                       with reference to the incremental borrowing rate for a loan with a similar       
                       period as the lease term. The rate will be determined by Telkom treasury,        
                       which acts as a centralised treasury function.                                   

Separation of          Where a lease includes various components, which are not service                 
lease components       related, management has applied the practical expedient to treat the             
                       components as one lease.                                                         

Low value assets       The group has elected to apply the practical expedient to account for all        
and short-term         short term leases (less than 12 months) as operating expenses. All leases where 
leases                 the underlying asset being used is of low value (less than $5 000) are assessed 
                       on a lease-by-lease basis and accounted for as expenses as incurred.

Lease term             It will be assumed that in the event where a lease termination clause            
                       exists which is exercisable at the lessee's discretion that the termination      
                       option will not be exercised.                                                    

                       It has been assumed that where a lease contract is currently ongoing             
                       on a monthly basis, that the lease term be limited to the one month              
                       enforceable period and therefore that the lease be excluded from the             
                       lease population for the calculation of the right-of-use asset and liability     
                       on adoption of the standard.                                                     

                       Where a contract contains a renewal clause, management has assumed               
                       that the lease will be renewed for a period calculated based on past             
                       historical renewal behaviour, taking into consideration the strategic            
                       nature of the asset.                                                             

Transition
The group is adopting the new standard on 1 April 2019, using the modified retrospective approach. The cumulative
effect of adopting IFRS 16 will therefore be recognised as an adjustment to the opening balance of retained earnings 
at 1 April 2019, with no restatement of comparative information.  

The group will also adopt the practical expedient in IFRS 16 to apply the new standard to all contracts being
accounted for under IAS 17 and IFRIC 4 at 1 April 2019 and to apply the principles outlined in IFRS 16 for identifying 
a lease to all new contracts entered into after that date.

4.    Segment information
The executive committee (Exco) is the group's chief operating decision maker (CODM). Management has determined the
operating segments based on the reports reviewed by Exco that are used to make strategic decisions, allocate 
resources and assess performance of each reportable segment. 

The CODM reviews the performance of the operating segments on an EBITDA basis. During the period, management removed
the net operating revenue line item from its assessment of the performance for segment reporting purposes. For this
purpose, the reportable segments have been determined as Openserve, Consumer, BCX, Gyro and "Other". Gyro also met the
quantitative thresholds to be disclosed as a separate segment in the current reporting period.

EBITDA is defined as earnings before finance income and finance cost (which includes gains and losses on foreign
exchange transactions), tax, depreciation and amortisation and is also presented inclusive of the following items:
- Significant financing component; and
- Interest on overdue accounts

The significant financing component is included in operating revenue as a separate component of revenue.

"Other" includes Yellow Pages and other business units.

The 31 March 2018 segment information has been restated for the adoption of IFRS 15 Revenue from Contracts with
Customers, the change in presentation basis and the SOX and Mobile CPE error.

During the current reporting period, the structure of the segment below has been updated to reflect operating expenses
on an operating segment level. The comparative segment has been restated to reflect intersegmental transactions in all
operating expenses and costs included in net operating revenue per segment. During the current year, the Fastnet
business was transferred from the Gyro group into BCX. The comparative segment information has been restated to 
include Fastnet as part of the BCX segment.

The current period EBITDA for segmental purposes has been normalised for voluntary severance, retirement and 
retrenchment package expenses of R728 million.

                                              Openserve   Consumer      BCX   Gyro   Other   Eliminations   Consolidated    
March 2019                                           Rm         Rm       Rm     Rm      Rm             Rm             Rm    
Revenue from external customers*                  4 207     18 866   17 426    609     666              -         41 774    
Revenue recognised over time                                                                                                
  Voice                                               -      6 845    5 633      -       -              -         12 478    
  Interconnection                                   792        270        -      -       -              -          1 062    
  Data                                            3 415      8 913    3 446      -       -              -         15 774    
  Information technology services                     -          -    5 841      -       -              -          5 841    
  Significant financing component revenue             -        191        -      -       -              -            191    
  Sundry revenue                                      -          -      269      -       -              -            269    
Revenue recognised at a point in time                                                                                       
  Customer premises equipment                         -      2 635    1 314      -       -              -          3 949    
  Information technology hardware                     -          -      923      -       -              -            923    
  Sundry revenue                                      -         12        -      -     666              -            678    
Operating lease revenue                               -          -        -    609       -              -            609    
Intersegmental operating revenue                 12 733        348    2 154    560   1 349        (17 144)             -    
Other income                                        378        615      117      -     809         (1 200)           719    
Payments to other operators                        (954)    (1 958)    (729)     -       -            701         (2 940)   
Cost of handsets, equipment and                                                                            
directories                                           -     (2 959)  (2 121)     -    (244)           119         (5 205)   
Sales commission, incentives and                                                                           
logistical costs                                     (6)    (1 250)    (213)     -       -             12         (1 457)   
Employee expenses                                (3 628)      (735)  (4 538)  (104) (1 032)           (12)       (10 049)   
Selling, general and administrative expenses     (4 009)   (10 951)  (8 125)   (88) (1 083)        16 839         (7 417)   
Service fees                                     (1 721)      (416)    (490)  (185)   (335)           213         (2 934)   
Operating leases                                   (708)      (530)    (241)  (107)    (68)           472         (1 182)   
Earnings before interest, tax,                                                                             
depreciation and amortisation (EBITDA) for                                                                 
reportable segments including                                                                              
intersegmental transactions                       6 292      1 030    3 240    685      62              -         11 309    
Reconciliation of operating profit to                                                                      
profit before tax                                                                                          
Normalisations                                                                                                              
Voluntary severance, retirement and                                                                         
retrenchment package expenses                                                                                       (728)   
Adjusted earnings before interest, tax,                                                                    
depreciation and amortisation (EBITDA)                                                                     
for reportable segments                                                                                           10 581    
Depreciation, amortisation, impairments,                                                                   
write-offs and losses                                                                                             (5 814)   
Operating profit                                                                                                   4 767    
Investment income                                                                                                    185    
Income/(loss) from associates                                                                                          2    
Net finance charges, hedging costs and                                                                     
fair value movements                                                                                                (947)   
Profit before taxation                                                                                             4 007    
Other segment information                                                                                                   
Capital expenditure of property, plant                                                                     
and equipment and intangible assets               4 034      3 070      304     60     206              -          7 674    
* Revenue includes balances generated by subsidiaries of BCX in countries outside of South Africa.
  These are however not considered material to the group and are thus not disclosed separately.

                                              Openserve   Consumer      BCX   Gyro   Other   Eliminations   Consolidated
                                                     **         **       **             **             **             **             
Restated March 2018***                               Rm         Rm       Rm     Rm      Rm             Rm             Rm
Revenue from contracts with external                     
customers*                                        4 296     16 129   17 790    709      737              -         39 661    
Revenue recognised over time                                                                                                 
  Voice                                               -      7 052    6 499      -        -              -         13 551    
  Interconnection                                   868        166        -      -        -              -          1 034    
  Data                                            3 351      6 773    3 563      -       95              -         13 782    
  Information technology services                     -          -    5 678      -        -              -          5 678    
  Significant financing component revenue             -        142        -      -        -              -            142    
  Sundry revenue                                      -          -      218      -        -              -            218    
Revenue recognised at a point in time                                                                                        
  Customer premises equipment                         -      1 980    1 140      -        -              -          3 120    
  Information technology hardware                     -          -      692      -        -              -            692    
  Sundry revenue                                     77         16        -      -      642              -            735    
Operating lease revenue                               -          -        -    709        -              -            709    
Intersegmental operating revenue***              13 229        372    2 473    235    3 720        (20 029)             -    
Other income                                        345        807        3      -      769         (1 317)           607    
Payments to other operators                      (1 296)    (1 247)    (922)     -      (12)           871         (2 606)   
Cost of handsets, equipment and directories          (1)    (2 163)  (2 051)     -        -           (196)        (4 411)   
Sales commission, incentives and                                            
logistical costs                                    (48)      (779)    (184)     -        -             76           (935)   
Employee expenses                                (4 145)    (1 003)  (4 777)   (59)    (693)             -        (10 677)   
Selling, general and administrative                                         
expenses***                                      (4 380)   (11 463)  (8 178)  (161)  (3 305)        20 402         (7 085)   
Service fees                                     (1 502)      (323)    (629)  (410)    (164)             -         (3 028)   
Operating leases                                   (594)      (476)    (215)     -      (12)           193         (1 104)   
Earnings before interest, tax,                                              
depreciation and                                                                              
amortisation (EBITDA) for reportable                                        
segments including intersegmental                                           
transactions                                      5 904       (146)   3 310    314    1 040              -         10 422    
Reconciliation of operating profit                                          
to profit before tax                                                                      
Earnings before interest, tax,                                              
depreciation and amortisation                                               
(EBITDA) for reportable segments                                                                                   10 422    
Depreciation, amortisation,                                                 
impairments/(reversals),                                                    
write-offs and losses                                                                                              (5 585)   
Operating profit                                                                                                    4 837    
Investment income                                                                                                     186    
Income/(loss) from associates                                                                                         (70)   
Net finance charges, hedging costs                                          
and fair value movements                                                                                             (842)   
Profit before taxation                                                                                              4 111    
Other segment information                                                                                                    
Capital expenditure of property, plant                                      
and equipment and intangible assets               4 728      2 359      504     29      289              -          7 909    

Entity wide disclosures
All material non-current assets other than financial instruments, deferred tax assets, post-employment benefit assets,
and rights arising under insurance contracts related to the segments above are located in South Africa. Assets
belonging to the subsidiaries of BCX outside of South Africa are not considered material to the group as a whole. 

No single customer contributes more than 10% of the revenue from external customers and thus no specific information
related to major customers is included in the segment information above.

For the purpose of assessing revenue contribution per customer, management does not treat Government as a single
customer.
*   Revenue includes balances generated by subsidiaries of BCX in countries outside of South Africa. These are
    however not considered material to the group and are thus not disclosed separately.
**  Restated. Refer to note 3.3, 3.4, 3.5 and 3.6. 
*** Restated to reflect the revised measurement basis used by the CODM to measure the performance of the reportable
    segments in the current financial year.

5.    Operating expenses
                                                                                              Restated     
                                                                              31 March        31 March     
                                                                                  2019            2018    
                                                                                    Rm              Rm    
Employee expenses                                                               10 777          10 677    
Included in employee expenses is a R728 million                         
(31 March 2018: Rnil) provision for voluntary severance,                          
retirement and retrenchment packages.                                      
Depreciation, amortisation, impairments,                                
write-offs and losses                                                            5 814           5 585    
Depreciation of property, plant and equipment                                    4 842           4 760    
Amortisation of intangible assets                                                  702             778    
Write-offs, impairments and losses of property,                         
plant and equipment and intangible assets                                          270              47    

During the year, the group reassessed the useful lives on various technologies. The reassessment takes into account
the group's current CAPEX strategy and changes in the technological environment. The reassessment of useful lives
decreased the depreciation and amortisation expense at a group level by R537 million (31 March 2018: R280 million). 

The depreciation for the remaining useful life of the group's assets will be increased by this amount.

Provision for credit losses
The group accounts for specific provisions for credit losses where there are indicators of impairment identified
relating to a trade receivable balance. For the period under review, the group reassessed provisions raised at 
31 March 2018. The expected losses, based on management's best estimate in the previous reporting period have 
not materialised as expected and management has subsequently reversed the provision for credit losses raised 
on these specific debtors. This has resulted in a reduction in the provision for credit loss expense 
of R157 million in the current year.

6.    Earnings and dividend per share
                                                                                              Restated     
                                                                              31 March        31 March    
                                                                                  2019            2018    
Total operations                                                                                          
Basic earnings per share (cents)*                                                561.9           575.7    
Diluted earnings per share (cents)*                                              551.8           563.6    
Headline earnings per share (cents)*                                             619.2           589.3    
Diluted headline earnings per share (cents)*                                     608.1           577.0    
                                                                                         
Reconciliation of weighted average number of ordinary shares:                Number of       Number of     
                                                                                shares          shares    
Weighted ordinary shares in issue                                          511 140 239     522 421 876    
Weighted average number of treasury shares                                 (13 759 299)    (15 728 674)   
Weighted average number of shares outstanding                              497 380 940     506 693 202    
Reconciliation of diluted weighted average number of ordinary shares:                               
Weighted average number of shares outstanding                              497 380 940     506 693 202    
Expected future vesting of shares related to group share 
scheme incentive plans                                                       9 146 285      10 840 186    
Diluted weighted average number of shares outstanding                      506 527 225     517 533 388    
* The disclosure of headline earnings is a requirement of the JSE Limited and is not a recognised 
  measure under IFRS. It has been calculated in accordance with the South African Institute of 
  Chartered Accountants' circular 4/2018 issued in this regard.

                                                                                              Restated     
                                                                              31 March        31 March    
                                                                                  2019            2018
                                                                                    Rm              Rm    
Total operations                                                                                          
Reconciliation between earnings and headline earnings:                                                    
Profit for the year                                                              2 831           2 998    
Non-controlling interests                                                          (36)            (81)   
Profit attributable to owners of Telkom                                          2 795           2 917    
Profit on disposal of property, plant and equipment and                                    
intangible assets                                                                   (2)            (59)   
Write-offs, impairments and losses of property, plant and                          270              47    
equipment and intangible assets                                                                           
Remeasurement of associates                                                         30             96    
Taxation effects**                                                                 (13)            (15)   
Headline earnings                                                                3 080           2 986    
Dividend per share (cents)                                                      349.11          408.89    

The dividend per share is based on a dividend of 236.97 cents per share declared on 28 May 2018 and 
112.14 cents per share declared on 13 November 2018 (31 March 2018: 290.75 cents per share declared 
on 1 June 2017 and 118.11 cents per share declared on 10 November 2017). 511,140,239 number of 
ordinary shares were outstanding on the dates of the dividend declaration (31 March 2018: 
526,948,700).
** The taxation impact consists of a R13 million increase (31 March 2018: R15 million) in tax expense 
   related to recoupment of tax on write-offs of property, plant and equipment and intangible assets.

7.    Capital additions and disposals
                                                                              31 March        31 March    
                                                                                  2019            2018    
                                                                                    Rm              Rm    
Property, plant and equipment                                                                             
  Additions                                                                      7 034           7 416    
  Disposals                                                                        (40)            (19)   
                                                                                 6 994           7 397    
Intangible assets                                                                                         
  Additions                                                                        640             493    
  Disposals                                                                        (30)             (4)   
                                                                                   610             489    

Finance charges of R59 million (31 March 2018: R135 million) were capitalised to property, plant and 
equipment in the current financial period.

8.    Net cash and cash equivalents
                                                                                              Restated    
                                                                              31 March        31 March     
                                                                                  2019            2018    
                                                                                    Rm              Rm    
Cash disclosed as current assets                                                 1 428           2 557    
  Cash and bank balances                                                         1 308           1 498    
  Short-term deposits                                                              120           1 059    
Credit facilities utilised                                                           -             (30)   
Net cash and cash equivalents                                                    1 428           2 527    
Undrawn borrowing facilities                                                     6 402           5 250    

The undrawn borrowing facilities are unsecured and bear interest at a rate that will be mutually agreed between the
borrower and lender at the time of drawdown. These facilities are subject to annual review and are in place to ensure
liquidity. At 31 March 2019, R5.3 billion (31 March 2018: R4.5 billion) of these undrawn facilities were committed.

9.    Deferred taxation
                                                                                              Restated    
                                                                              31 March        31 March     
                                                                                  2019            2018    
                                                                                    Rm              Rm    
Deferred taxation balance is made up as follows:                                    93             313    
Deferred taxation assets                                                           255             494    
Deferred taxation liabilities                                                     (162)           (181)   

The decrease in the deferred tax balance in the current year is attributable to a R67 million (31 March 2018: Rnil) 
additional liability raised in Telkom SA SOC Limited relating to the actuarial gains recognised on the post-employment 
benefit plans. This movement was accounted for in other comprehensive income. The remaining movement in the asset is 
attributable to the IFRS implication noted below, as well as the full recognition of the deferred tax asset in
respect of prior year losses and the utilisation of temporary differences.   

At 31 March 2018, the group did not recognise a deferred tax asset of R341 million in respect of temporary 
differences and tax losses amounting to R1 220 million that could be carried forward against future taxable 
income. These differences originated in Telkom company in the prior year. There was no unrecognised deferred 
tax asset at 31 March 2019.

The adoption of IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments has had no impact on
the deferred tax asset position as a result of the limitation of the deferred tax asset applied in the Telkom company
results in the prior year. The 1 April 2018 adjustment to the allowance account for credit losses attributable to the 
change in the write-off criteria following the adoption of IFRS 9 has resulted in a reduction of the deferred tax asset 
of R41 million. 

10.   Fair value measurement
Exposure to continuously changing market conditions has made management of financial risk critical for the group.
Treasury policies, risk limits and control procedures are continuously monitored by the Board of Directors through 
its Audit and Risk Committees.

10.1  Fair value of financial instruments
Valuation techniques and assumptions applied for the purposes of measuring fair value:

                             Fair value at
     Type of financial       31 March 2019                 Valuation               Significant     
            instrument                  Rm                 technique                    inputs         
                                                                                                  
            Derivative                 231           Discounted cash                     Yield     
                assets                                         flows                    curves    
            Derivative                (280)                                             Market     
           liabilities                                                          interest rates 

    Investment in ABSA               1 573             Quoted market             Market prices    
          sinking fund                           prices adjusted for                               
                                                 counterparty credit                               
                                                                risk                          

         Investment in                  69           Discounted cash       Cash flow forecasts     
          FutureMakers                                         flows        and market related     
                                                                                discount rates 

             Interest-             (10 327)          Discounted cash                    Market     
          bearing debt                              flows and quoted             interest rate    
                                                         bond prices                              

Derivative instruments are measured at fair value through profit or loss.

Fair value hedge
The foreign forward exchange contracts designated as fair value hedges, are being used to hedge the exposure 
to changes attributable to movement in the spot exchange rate of its firm commitments.

A decrease in fair value of the forward exchange contracts, designated as fair value hedges, of R311 million 
(31 March 2018: decrease of R319 million) has been recognised in finance charges and fair value movements and 
offset with a similar gain (31 March 2018: gain) on the hedged items (property, plant and equipment and inventory). 

The estimated net fair values as at the reporting date have been determined using available market information and
appropriate valuation methodologies as outlined on the previous page. The fair values of the financial assets and 
financial liabilities are sensitive to exchange rate and interest rate movements.

Derivatives are recognised at fair value. The fair values of derivatives are determined using quoted prices or,
where such prices are not available, a discounted cash flow analysis is used. These amounts reflect the approximate 
values of the net derivative position at the reporting date. 

The fair values of the borrowings disclosed above are based on quoted prices or, where such prices are not available,
the expected future payments discounted at market interest rates. As a result, they differ from their carrying values.

The fair value of cash and short-term deposits, trade and other receivables, finance leases, shareholders for dividend
and trade and other payables approximate their carrying amounts largely due to the short-term maturities of these
instruments and market related interest rates included in finance lease receivables. Long-term receivables and borrowings 
are evaluated by the group based on parameters such as interest rates, specific country factors and the individual
creditworthiness of the customer. Based on this evaluation, allowances are taken into account for the expected losses 
of these receivables. As at the reporting date, the carrying amount of such receivables, net of allowances, are not 
materially different from their calculated fair values. Fair values of quoted bonds are based on price quotations at 
the reporting date.

10.2  Fair value hierarchy
The table below analyses financial instruments carried at fair value and amortised cost, by valuation method.

The different levels have been defined as follows:
a) Quoted prices in active markets for identical assets or liabilities (level 1).
b) Inputs other than quoted prices, that are observable for the asset or liability (level 2).
c) Inputs for the asset or liability that are not based on observable market data (level 3).

                                                                               31 March       31 March     
                                                               Hierarchy           2019           2018    
                                                                  levels*            Rm             Rm    
Assets measured at fair value                                                                            
  Investment in Absa sinking fund                                Level 2          1 573          1 509    
  Investment made by FutureMakers                                Level 3             69             50    
  Forward exchange contracts                                     Level 2            161             14    
  Firm commitments                                               Level 2             70            149    
Liabilities measured at fair value                                                                        
  Forward exchange contracts                                     Level 2            (13)          (222)    
  Interest rate swaps                                            Level 2            (30)           (23)    
  Firm commitments                                               Level 2           (237)            (5)    
Liabilities measured at amortised cost                                                                    
  Interest-bearing debt consisting of:                                                                    
  Listed debt                                                    Level 2        (10 327)         (9 694)    
* There have been no transfers between the fair value levels in the year under review.

11.   Business combinations and disposals
Subsidiaries classified as held for sale in the year
In the prior period, BCX initiated a review of its investment portfolio. At 31 March 2018, management had identified
its full African portfolio and the Smart Office Connexion group as held for sale.

During the current period, management reversed the decision to dispose of its African subsidiaries in the Southern
African Development Community (SADC). The investment in BCX Nigeria and BCX Tanzania remains classified as held for 
sale.

The mandate provided to management by the board to dispose of the Smart Office Connexion group expired in June 2018
and the asset was no longer held for sale at this date. During the second half of the year, management re-initiated 
the sale negotiations regarding the sale. As at 31 March 2019, the sale of the SOX group is considered highly probable. 
The asset held for sale is accounted for at its fair value less costs of disposal of R200 million (31 March 2018: 
R204 million).

The remaining investments classified as held for sale are immaterial to the financial statements as a whole and have
not been disclosed separately in the statement of financial position and statement of profit or loss and other
comprehensive income.

African subsidiaries - BCX Tanzania and BCX Nigeria                                                 Rm    
Revenue                                                                                            366    
Expenses                                                                                          (358)   
Net finance costs and fair value movements                                                         (11)   
Loss before tax                                                                                     (3)   
Taxation                                                                                            (2)   
Loss for the period                                                                                 (5)   
Total non-current assets                                                                            28    
Total current assets                                                                               149    
Total non-current liabilities                                                                        1    
Total current liabilities                                                                           94    

The assets above have been revalued to the lower of the carrying value at the date of classification as held 
for sale and the fair value less costs to sell in the prior period.

There was no additional impairment loss recognised on these assets in the current financial period.

An impairment of R30 million (31 March 2018: R96 million) was recognised on the investment in SOX following the
increase in carrying value of the investment owing to the equity accounted income of R26 million (31 March 2018: 
R20 million) of the SOX group of entities.

12.   Interest-bearing debt
                                                                                              Restated    
                                                                               31 March       31 March     
                                                                                   2019           2018    
                                                                                     Rm             Rm    
Non-current interest-bearing debt                                                 4 840          7 158    
Local debt                                                                        4 700          6 998    
Foreign debt                                                                        123            118    
Finance leases                                                                       17             42    
Current portion of interest-bearing debt                                          5 401          2 239    
Local debt                                                                        5 370          2 200    
Foreign debt                                                                          5              4    
Finance leases                                                                       26             35    

The current portion of interest-bearing debt of R5 401 million (31 March 2018: R2 239 million) for group as 
at 31 March 2019 is expected to be repaid from operational cash flow and other borrowings.

During the period under review, additional loans to the value of R3 246 million (31 March 2018: R7 680 million) 
in the form of commercial paper were raised. No material transaction fees were raised upon the issue of these 
debt instruments. The instruments have an average interest rate of 7.9% and are repayable over an average 
term of 6 months.

13.   Provisions
                                                                                              Restated     
                                                                               31 March       31 March     
                                                                                   2019           2018    
                                                                                     Rm             Rm    
Non-current employee related provisions                                           1 186          2 388    
Subsidiary defined benefit plans                                                     22             21    
Telephone rebates                                                                   412            402    
Telkom Retirement Fund                                                              752          1 965    
Current portion of employee related provisions                                    1 175          1 325    
Annual leave                                                                        466            573    
Post-retirement medical aid                                                           -              6    
Telephone rebates                                                                    39             39    
Bonus, termination packages and other benefits                                      670            707    
Non-current non-employee related provisions                                                               
Other                                                                                 7             39    
Current portion of non-employee related provisions                                                        
Other                                                                               141            164    

Annual leave 
In terms of the group's policy, employees are entitled to accumulate vested leave benefits not taken within 
a leave cycle, to a cap of 15-30 days (31 March 2018: 22-30 days), which must be taken within a 6-19 month 
(31 March 2018: 12-18 month) leave cycle. The leave cycle is reviewed annually and is in accordance with 
legislation.

Bonus
The bonus scheme consists of performance bonuses which are dependent on the achievement of certain financial and
non-financial targets. The bonus is payable annually to all qualifying employees after the group's results have 
been made public, with a 14th cheque for a certain group of employees. 

Voluntary Early Retirement Packages (VERP)/Voluntary Severance Packages (VSP) and retrenchment provision
During the year under review, the group initiated a voluntary severance and retrenchment process. An expense 
relating to the process of R728 million (31 March 2018: Rnil) was recognised.

Non-employee related provisions
Other provisions relate to the ICASA licence fee provision, a restoration provision, provisions for legal 
matters and contingent consideration relating to prior year business combinations.

Telkom Retirement Fund
The decrease in the Telkom Retirement Fund obligation is primarily driven by the increase in the discount 
rate from 8.80% to 9.70%. This resulted in an actuarial gain of R1 334 million.

14.   Commitments
                                                                               31 March       31 March     
                                                                                   2019           2018    
                                                                                     Rm             Rm    
Capital commitments authorised                                                    9 744          9 270    
Commitments against authorised capital expenditure                                5 671          4 350    
Authorised capital expenditure not yet contracted                                 4 073          4 920    

Capital commitments comprise of commitments for property, plant and equipment and software included in 
intangible assets.

Management expects these commitments to be financed from internally generated cash and borrowings.

15.   Trade and other receivables and contract assets
                                                                                              Restated     
                                                                               31 March       31 March     
                                                                                   2019           2018    
                                                                                     Rm             Rm    
Trade and other receivables                                                       7 425          6 370    
  Trade receivables                                                               5 884          4 811    
    Gross trade receivables                                                       7 091          5 638    
    Impairment of receivables                                                    (1 207)          (827)   
  Prepayments and other receivables                                               1 541          1 559    
Contract assets                                                                   2 518          1 672    
  Gross contract assets - Handset receivables                                     2 331          1 520    
  Contract cost assets                                                              226            149    
  Ongoing commission capitalised assets                                             131             98    
  Impairment of contract assets - Handset receivables                              (170)           (95)   
Contract cost assets                                                                226            149    
  Assets recognised from costs incurred to obtain a contract                        149            118
  Contract costs capitalised during the year                                        255            154
  Amortisation recognised as cost of providing services                               
  during the year                                                                  (178)          (123)
Allowance account for credit losses - trade receivables                           1 207            827    
  Opening balance as previously reported                                            827            528    
  Adoption of IFRS 9 Financial Instruments - Adjustment                             (61)             -    
  to allowance account measurement                                                                        
  Adoption of IFRS 9 Financial Instruments - Change to                              559              -    
  write-off criteria                                                                                      
  Charged to statement of profit or loss and other                                  184            537    
  comprehensive income                                                                                    
  Receivables written-off                                                          (302)          (238)   
Allowance account for credit losses - contract assets                               170             95    
  Opening balance as previously reported                                             95             65    
  Charged to statement of profit or loss and other                                  200             98    
  comprehensive income                                                                                    
  Contract assets written-off                                                      (125)           (68)   

The repayment terms of trade receivables vary between 21 days and 45 days from date of invoice. Interest 
charged on overdue accounts varies between a rate of prime and a rate of 18%, depending on the contract terms.

16. Contingencies
Contingent liabilities
Other than the disclosures below, there have been no significant movement or new matters noted on the contingent
positions as reported in the 31 March 2018 financial statements.

High court
Radio Surveillance Security Services (Pty) Ltd (RSSS)
In December 2011, RSSS served a summons on Telkom for the sum of R216 million. Telkom defended the matter. The trial
was finalised in March 2018. Judgement was granted in April 2018. The claim of RSSS was dismissed with costs. RSSS made
an application for leave to appeal to the Supreme Court of Appeal, which was dismissed. The matter is considered settled.

Phutuma Networks (Pty) Ltd (Phutuma)
In August 2009, Phutuma served a summons on Telkom, claiming for damages, in the amount of R5.5 billion, arising from
a tender published by Telkom in November 2007. The High Court granted absolution from the instance, in Telkom's favour.
The Supreme Court of Appeal (SCA) had initially dismissed Phutuma's application for leave to appeal in October 2014. 
On 4 November 2014, the SCA rescinded its order granted in October 2014. In early 2015, the SCA referred the application
for leave to appeal back to the full bench of the North Gauteng High Court. The leave to appeal was heard in September
2016 and was upheld. The matter now needs to be re-enrolled for trial.

Tax matters
As noted in the prior year consolidated annual financial statements, the tax treatment of the loss that arose in the
2012 and 2014 financial years on the sale of foreign subsidiaries is based on a specific set of circumstances and a
complex legislative environment. The 2012 matter was heard in the Tax Court in August 2018 and an appeal has been filed
against the Tax Court judgement received, and as such, the dispute with SARS remains unresolved. The tax refund received,
relating to the 2012 sale, therefore remains contingent and will only be recognised once the matter has been resolved.   

17.   Related parties
                                                                                              Restated     
                                                                               31 March       31 March     
                                                                                   2019           2018    
                                                                                     Rm             Rm    
Details of material transactions and balances with related                                 
parties not disclosed separately in the summary consolidated                               
provisional financial statements were as follows:                                          
With shareholders:                                                                                        
Government of South Africa                                                                                
Related party balances                                                                                    
Finance lease receivable                                                            207            229    
Trade receivables                                                                 1 370          1 010    
Provision for doubtful debt                                                        (212)          (207)   
Related party transactions                                                                                
Revenue                                                                          (4 128)        (4 557)   

At 31 March 2019, the Government of South Africa held 40.5% (31 March 2018: 40.5%) of Telkom's shares, 
and had the ability to exercise significant influence. The Public Investment Corporation held 11.9% 
(31 March 2018: 12.9%) of Telkom's shares. 
                                                                                              Restated     
                                                                               31 March       31 March     
                                                                                   2019           2018    
                                                                                     Rm             Rm    
With entities under common control:                                                                       
Major public entities                                                                                     
Related party balances                                                                                    
Trade receivables                                                                    42             54    
Provision for doubtful debt                                                          (2)           (10)   
Trade payables                                                                      (35)           (12)   
Related party transactions                                                                                
Revenue (excluding operating lease income)                                         (456)          (573)   
Operating expenses (excluding operating lease expenses)                             399            427    
Operating lease income                                                              (27)           (23)   
Operating lease expense                                                              30             19    
Key management personnel compensation:                                                                    
(Including directors and prescribed officers' emoluments)                                                 
Related party transactions                                                                                
Short-term employee benefits                                                        272            247    
Post-employment benefits                                                             17             15    
Termination benefits                                                                 13             25    
Equity compensation benefits                                                         22             (3)   

Terms and conditions of transactions with related parties
Except as indicated above, outstanding balances at 31 March 2019 are unsecured and settlement occurs in cash. 
There have been no guarantees provided or received for any related party receivables or payables. Except as 
indicated above, for the year ended 31 March 2019, the group has not impaired any of the amounts owed by the  
related parties. This assessment is undertaken each financial period through examining the financial position 
of the related party and the market in which the related party operates.

18. Reconciliation of profit for the year to cash generated from operations
                                                                                              Restated    
                                                                               31 March       31 March    
                                                                                   2019           2018    
                                                                                     Rm             Rm    
Cash generated from operations                                                    8 903         10 113    
Profit for the year                                                               2 831          2 998    
Finance charges and fair value movements                                            947            842    
Taxation                                                                          1 176          1 113    
Investment income and income from associates                                       (187)          (116)   
Interest received from trade receivables                                           (250)          (130)   
Non-cash items                                                                    5 519          5 779    
Depreciation, amortisation, impairment and write-offs                             5 814          5 585    
(Decrease)/increase in provisions                                                  (162)           181    
Sale of property, plant and equipment                                                (2)           (59)   
Foreign exchange movements                                                          (29)            25    
Share based payment expenses                                                        135             48    
Deferred revenue                                                                   (237)            (1)   
Movement in working capital                                                      (1 133)          (373)   
Inventories                                                                         (94)           (56)   
Accounts receivable                                                              (1 280)           (11)   
Accounts payable                                                                    241           (306)   
                                                                                                          
19.   Net debt reconciliation
                                                                                              Restated    
                                                                               31 March       31 March    
                                                                                   2019           2018    
                                                                                     Rm             Rm    
Total interest-bearing debt at reporting date                                    10 241          9 397    
Total interest-bearing debt at the beginning of the year                          9 397          6 268    
Loans raised                                                                      3 246          7 680    
Loans repaid                                                                     (2 544)        (4 685)   
Finance leases repaid                                                               (42)           (16)   
Foreign exchange revaluation on loans                                                12              -    
Finance charges capitalised to interest-bearing debt                                172            150    

Interest accruals include the effect of interest amortised and accrued for in the closing balance of 
interest-bearing debt.

The group classifies interest paid as cash flow from operating activities.

20. Significant events and transactions
Results of the Telkom Annual General Meeting regarding directors re-appointments
On 23 August 2018, all board members were elected as per the Annual General Meeting ordinary resolutions.

Dividends
The Telkom Board declared an ordinary dividend of 237 cents per share on 28 May 2018 which was paid on 
25 June 2018 to shareholders registered on 22 June 2018.

The Telkom Board also declared an ordinary dividend of 112 cents per share on 13 November 2018 which was paid 
on 3 December 2018 to shareholders registered on 30 November 2018.

Employee Share Plan
In May and June 2018, Telkom purchased 901,068 shares from the market through Rossal, a wholly owned subsidiary, 
for the purposes of the employee share plan. 

Allocation of shares in terms of the Telkom Employee Share Plan
On 25 May 2018, the board approved the sixth allocation of shares to employees in terms of its Employee Share Plan. 

The number of shares to vest will depend on the extent to which the performance conditions are met at the end of the
applicable vesting period.

Vesting of shares
In terms of the Telkom Share Plan 101 191 and 31 500 shares vested to Mr Sipho Maseko and  Mr Deon Fredericks
respectively in June 2018.

Appointment of new group chief financial officer and executive director
Telkom announced on 27 June 2018 that Mr Deon Fredericks would step down as group chief financial officer and
executive director with effect 30 June 2018. Ms Tsholofelo Molefe has been appointed as the new group chief 
financial officer and as an executive director of the Telkom Board with effect from 1 July 2018.

BCX Section 189 Process
On 7 November 2018, BCX issued a company-wide communication advising its employees that it had served unions with a
notice in terms of section 189 of the Labour Relations Act. The matter was finalised in February 2019.

Conclusion of Telkom and Vodacom roaming and facilities leasing agreement
On 7 November 2018, Telkom and Vodacom concluded a new roaming and facilities agreement. The roaming agreement covers
2G, 3G and LTE roaming with seamless handovers between Telkom and Vodacom networks. The facilities leasing agreement
will allow Telkom to use Vodacom towers, antennas and shelters to build out its own network. Telkom currently has a 
roaming agreement with MTN which expires in June 2019. The company is conducting a phased transition from the current 
roaming agreement, which will be concluded by the end of the contract period.

Change in JSE sponsor
Telkom announced on 22 March 2019 that it had made a decision that Telkom will be rotating the role of The Standard
Bank of South Africa Limited as JSE Sponsor, with effect from 30 June 2019.

The company has appointed Nedbank Corporate and Investment Banking, a division of Nedbank Limited, as JSE Sponsor,
with effect from 1 July 2019.

Retirement of non-executive director
Telkom announced on 24 July 2018 that Mr Itumeleng Kgaboesele, an independent non-executive director, would be
retiring from the Telkom Board with effect from 23 August 2018.

Telkom announced on 24 August 2018 that Dr Hamadaun Toure has resigned from the board of directors of Telkom as an
independent non-executive director with effect from 23 August 2018.

On 21 February 2019, Telkom advised the market that Mr Jabu Mabuza will be stepping down as an independent
non-executive director and the chairman of the board of directors of Telkom, with effect from 31 May 2019.

Mr Sello Moloko, currently an independent non-executive director of the board, will act as the new chairman 
of the Telkom Board with effect from 1 June 2019.

Appointment of non-executive director
Telkom announced on 21 February 2019 that Dr Sibusiso Sibisi has been appointed to the board of directors of the
company as an independent non-executive director with effect from 1 April 2019.

Appointment of new external auditors
On 23 August 2018, the AGM ratified the appointment of PricewaterhouseCoopers Inc. and SizweNtsalubaGobodo Grant
Thornton Inc. for appointment as the joint external auditors for the group for the financial year ending 
31 March 2019.

21.   Events after the reporting date
Dividends
The Telkom Board declared an ordinary dividend of 249.40 cents per share on 27 May 2019, payable on 
18 June 2019 to shareholders registered at the close of business on 14 June 2019.

Acquisition of Trudon (Pty) Ltd minority interest
On 20 March 2019, the Telkom Board approved the acquisition of the minority shareholding in Trudon (Pty) Ltd. 
During May 2019 the parties to the transaction signed the sale of shares agreement. The parties are awaiting 
approval from the Competition Commission to finalise the transaction.

Disposal of SOX interests
On 20 March 2019, the Telkom Board approved BCX's disposal of its stake in SOX Holdings (Smart Office 
Connexion Group Holdings Ltd.)

On 22 May 2019, the parties have agreed to the disposal of BCX's shares in the form of a repurchase of 
shares agreement, in terms of which SOX Holdings will buy back BCX's shares. The agreement is subject to 
the fulfilment (or waiver where appropriate) of certain condition precedents, including:
- Competition Commission approval; and
- The conclusion of service, support and maintenance agreements between BCX and SOX.

Other matters
The directors are not aware of any other matter or circumstance since the financial year ended 
31 March 2019 and the date of this report, or otherwise dealt with in the financial statements, which 
significantly affects the financial position of the group and the results of its operations.


Centurion
27 May 2019

Group company secretary
Ayanda Ceba
Tel: +27 12 311 0345
secretariat@telkom.co.za

Transfer secretaries
Computershare Investor Services (Pty) Ltd 
Rosebank Towers
15 Biermann Avenue
Rosebank, 2196
PO Box 61051
Marshalltown, 2107

Sponsor
The Standard Bank of South Africa Ltd 
Standard Bank Centre
30 Baker Street
Rosebank, 2196

Directors 
JA Mabuza (chairman), 
SN Maseko (group chief executive Officer), 
TBL Molefe (group chief financial Officer), 
SL Botha, GW Dempster, N Kapila*, 
K Kweyama, KW Mzondeki,
F Petersen-Cook, RG Tomlinson,
L von Zeuner, D Mokgatle,
S Moloko, S Luthuli

*In India

www.telkom.co.za
Date: 27/05/2019 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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